The price of Arabica coffee beans surged significantly on Monday amid fears of frost in Brazil. Traders are anticipating cold weather in the South American country this week, which could negatively impact the harvest, according to Bloomberg.
Prices rose by as much as 7% on the New York futures market, marking the largest increase in weeks. Over the past weekend, some areas in southern Brazil, the world’s largest coffee producer, experienced temperatures dipping below freezing. However, the drop was not severe enough to cause significant damage to sugarcane and coffee plantations.
Coffee brand Lavazza has noted that the coffee supply chain has been under pressure for some time due to a combination of factors, including climate change, disruptions in shipping, and new European regulations that are increasing costs for coffee roasters.
Consumers should also brace for higher coffee prices, warned Giuseppe Lavazza, the CEO of Lavazza, in an interview with the Financial Times last month. The Italian executive pointed out that Arabica coffee bean prices in New York had already reached their highest level since September 2022.
Earlier this year, the prices for Robusta beans, typically used in instant and filter coffee, hit an all-time high. According to traders, one of the key factors was a heatwave in Vietnam, the world’s largest producer and exporter of Robusta beans.