Rise in Coffee Prices Driven by Adverse Weather in Vietnam and Brazil

The robusta coffee market saw a significant increase, with futures contracts closing up 5.9%, or $228, at $4,120 per metric ton. This price surge reflects concerns over adverse weather conditions in the leading producer countries. In Vietnam, the largest producer of robusta, insufficient rainfall raises doubts about future production capacity, directly affecting market expectations and driving prices higher.

Simultaneously, arabica coffee prices also saw a notable rise, with the July contract jumping 5.8% to close at $2.3095 per pound after hitting a four-week high of $2.3320. This increase is attributed to unfavorable weather conditions and initial harvest reports in Brazil, which indicate production challenges. Brazilian coffee regions continue to face a dry and hot period, exacerbating risks for the 2025 crop and maintaining upward pressure on prices.

Traders and market analysts are closely monitoring the climatic variables influencing coffee supply. The current situation in Vietnam and Brazil demonstrates how weather conditions can drastically impact production and, consequently, prices in the global market. The persistence of unfavorable weather could continue to support high prices, while any improvement in climatic conditions might alleviate some of the supply pressures, stabilizing prices in the medium term.

Source: Investing.com