High coffee prices at all-time highs and still high volatility on the market
The uncertainty surrounding the introduction of a 50% tariffs on Brazilian produce by the US has triggered a new speculative phase that adds to the damage caused by the bad weather
2' min read
2' min read
Behind the high cup prices are the record high raw material prices, which started to run again after a brief pause in the first months of the year. Since the beginning of August, Arabica and Robusta coffee prices have risen by around 40%, with peaks of more than 50% for Arabica, which has returned close to its February 2025 record. The uncertainty surrounding the introduction of a 50% tariffs on Brazilian product by the US triggered a new speculative phase of bullish betting by funds, with an exponential increase in contracts by non-commercial traders.
Not helping to stabilise the market, analysts explain, is the weakness of the dollar, which was consolidated with Thursday's rate cut. The main driver of the rises and speculation isthe uncertainty surrounding Arabica supply in Brazil and Colombia, with a downward revision due to weather of up to 5 percent of Brazilian production estimates. The damage from drought and frost in some areas, however, is still to be assessed and the supply cut could be as much as 20 percent, with impacts on the 2026-27 marketing year as well.
Also in Colombia, 2025-26 production is expected to decline by 5%, mainly due to the effects of El Nino, with heavy rainfall in the flowering phase, adding to low investments by producers. In this conjuncture, certified stocks also suffered. Also for the Arabica variety, September represents the fourth consecutive month of decline, now at the lowest level since April 2024.
'For four years now, global production has not kept pace with consumption and coffee stocks have been steadily declining,' explains Enrica Gentile, CEO of Areté. The next campaign, starting in October, was expected to be the first to bring a new build-up of stocks, to the point of causing prices to fall between February and July 2025. Renewed concerns triggered by deteriorating weather conditions and US tariffs are fuelling a new phase of volatility in which the market seems to want to testagain the price peaks touched in February 2025'.
