%Coffee prices have spiked on concerns over the upcoming crop in Brazil, pushing the price of
robusta coffee beans to an all-time high.
The price of arabica coffee beans rose 3.10% on April 2 to afour-week high, while the price of robusta coffee increased 5.29% to close at a record level, according to market data.
The sharp price increases come amid growing concerns that heavy rains in Brazil’s coffee-growing region are damaging this year’s crop.
Brazil’s Minas Gerais region, the centre of the country’s coffee industry, received 75.4 mm of rainfall in the past week, which is335% above the historical average for this time of year.
Minas Gerais accounts for 30% of Brazil’s annual arabica coffee bean crop.
Brazil is the world’s largest producer of arabica coffee beansand any disruption to its crops sends prices higher.
The problems in Brazil come as Vietnam, the world’s largest producer of robusta coffee beans, said that its 2024 production is likely to drop 20% from last year.
Vietnam’s Agriculture Ministry has said that the country expects to ship 2.7 million fewer bags of robusta coffee beans in 2024 due to a poor crop yield.
Production estimates have also been revised down in other coffee producing nations such as Indonesia and Honduras in recent weeks.
This year’s El Nino weather event is bringing heavy rains to Brazil, negatively impacting coffee crop production in the country.
At the same time, El Nino has created drought conditions in Vietnam’s coffee region, hurting crop yields and diminishing production.
Agriculture analysts say the current situation is creating a “perfect storm” for the global coffee industry that is likely to continue pushing prices higher throughout 2024.
