Arabica coffee prices are up around 40% on the year and are expected to continue to rise. Orange juice prices are also on the rise
Coffee is set to become even more expensive as ongoing supply chain disruptions continue to drive up costs for premium Arabica beans, pushing the price to a 13-year high.
Futures contracts up 2% to $2.6475 an ounce in New York, at highs since 2011. Prices are up about 40% on the year as shortages of cheaper robusta beans boost demand for the Arabica variety, which is favored by specialty chains.
The rally in coffee prices fueled by continued concerns over the harsh weather conditions seen in top producer Brazil. The country is wrapping up its 2024-2025 harvest, with prospects anemic due to the heat and drought that have hit the fields.
Attention now turns to next season’s prospects as Brazil is suffering from the worst drought season of recent years, which threatens further damage to the crops.
The rise in coffee bean prices is reflected throughout the supply chain. JM Smucker Co.which controls the Folgers and Café Bustelo brands that dominate the US home coffee market, raised its prices last summer. The Pret A Manger chain has scrapped a subscription service it had in the UK where a customer could get up to five coffees a day.
In addition, the rise in coffee prices boosts inflation in the beverage category. Accordingly, they have moved upwards and the prices of orange juice due to shortages in production, while the record rise in cocoa futures boosts prices on chocolate drinks and desserts.
Source: Skai
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