Coffee Prices Surge

Coffee prices, as measured by the ICE KCH’25 futures contract, saw an extraordinary surge higher during the month of November. Prices traded as low as $2.4080/lb. on November 1st and moved dramatically higher, reaching a 47-year high on November 29th of $3.3545 before settling that day at $3.1805. Coffee market observers have witnessed dramatic price moves and volatility in years past, but to see prices move almost 40% higher in one month without a cataclysmic weather event in Brazil is unheard of.

Weather Impacting High Coffee Price

Drought conditions and higher-than-normal temperatures in Brazil’s coffee-growing regions beginning in spring and summer of this year have many concerned that the coffee trees are stressed from these weather issues and that the next crop (May 2025) could be impacted. The coffee market has seen supply issues throughout the past few years. Vietnam, the largest producer of robusta beans, had weather-related issues in 2023 and 2024 which helped keep coffee prices at historically high levels throughout 2024. To the concern of all in the importing and roasting trade: how high can these prices go, and when will this market correct to a more manageable level? We will continue to monitor the development of this next Brazil crop as this will greatly influence where prices go.