Highest Coffee Prices in Six Years Due to Frost in Brazil
The price of Arabica coffee reached its highest level in six years on Friday after the devastation to Brazil’s coffee fields. In addition, sudden, severe frost affected the coffee bushes last week.
This could have consequences for the harvests of the coming years. Bad weather in recent years has already reduced global inventories.
Prices for a pound of Arabica coffee rose 6 percent on Friday to $2.05 a pound on the New York Stock Exchange for futures contracts. It was the first time since October 2014 that the price exceeded 2 dollars per pound. In London, prices for Robusta, primarily used for instant coffee, reached their highest level in the past three years.
The madness in the coffee market has been going on for some time. But, over the week, Arabica coffee rose 27 percent in value, the most substantial seven-day increase since 1999.
Frost damage mainly affects young shrubs, which can hinder production for years. It is the worst frost in two decades. Brazil was the last hit by very cold temperatures in 1994 when coffee prices rose to a record high.
The frost is a second blow to plantation owners in Brazil, who also had to deal with severe drought a few months ago. This affected the production of maize and sugar.