Coffee, cocoa, and sugar prices continue their upward trend in global markets. Arabica coffee has reached record levels due to drought in Brazil, while supply shortage concerns in the cocoa market are driving prices higher. Sugar futures have also increased, with experts closely monitoring demand fluctuations.
Arabica Coffee Hits Record Highs
Arabica coffee futures reached a historic level of $4.1125 per pound on Thursday before rising another 1.1% on Friday to $4.0850 per pound.
Hot and dry weather conditions in Brazil throughout 2024 have raised expectations of a decline in the country’s arabica coffee production. This has tightened global supply and led speculators to increase their net long positions.
Market analysts are closely watching how the rapid rise in arabica coffee prices will impact demand.
A report from Commerzbank highlighted the widening price gap between arabica and robusta coffee, noting that robusta is emerging as a more affordable alternative.
Meanwhile, the National Coffee Federation of Colombia reported that the country produced approximately 1.36 million bags (60 kg each) of washed arabica coffee in January. In comparison, the same month in 2024 recorded a production of 959,000 bags.
Robusta coffee futures, on the other hand, fell by 0.9% to $5,593 per metric ton.
Cocoa Prices Continue to Climb
New York cocoa futures rose by 1.5% to $10,274 per ton. However, the market is on track for a 5.4% decline over the week.
Experts warn that high prices could limit demand, potentially slowing down the rate of increase. Additionally, better-than-expected cocoa production in Ghana is another factor tempering the upward price movement.
A report from JPMorgan projects a global cocoa market supply deficit of 40,000 metric tons for the 2024/25 season. Meanwhile, the International Cocoa Organization has forecasted a much larger global supply shortage of 478,000 tons for the 2023/24 season.
London cocoa futures also increased by 1.2% to £8,238 per ton.
Sugar Prices See Upward Movement
Raw sugar futures climbed by 0.5% to 19.67 cents per pound.
White sugar futures also gained 0.6%, reaching $525.70 per ton.
The fluctuations in global coffee, cocoa, and sugar prices will continue to be closely monitored in the coming period as supply and demand dynamics shape the market.
Source: CNBC-e/ Prepared by: İlayda Gök