Arabica coffee futures in New York rose another 3.1% following the sharpest intraday surge since 2021. Over the past week, the contract has risen by nearly 10%, according to Bloomberg.
The main reason is the weather in Brazil, the world’s largest coffee producer. Rain is slowing down the harvest—which was initially expected to be a record one—and heightening concerns about bean quality. According to a forecast by the weather service Climatempo, a new cold front is expected to move into the southern part of the country early next week, and the market is watching it particularly closely.
The wet weather is also forcing farmers to delay sales, reducing market supply, noted Thomas Araújo, a senior trader at StoneX. At the same time, Arabica stocks in exchange-certified warehouses continue to decline and have reached their lowest level since March 2024.
Sugar prices are also rising. Raw sugar futures in New York gained 2.9%, rising to their highest level in nearly a month and a half.
The situation in India—the world’s second-largest sugar producer—is providing additional support to the market. After the driest June in 12 years, forecasters expect that July—usually the rainiest month of the monsoon season—will also bring below-average rainfall. This is fueling concerns that sugar production may fall short of expectations, according to a source.
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