Global Coffee Futures Hit Two-Year High Amid Dry Weather

Coffee traders closely watch rainfall patterns in Brazil’s key growing regions—not just for crop health, but because dry weather can send global futures soaring. On Tuesday, those concerns materialized: Arabica coffee hit its highest price in two years, while Robusta reached a 12-month peak. Other commodities, including cocoa, also surged on supply worries, though sugar fell slightly.

The ICE May Arabica contract closed up 2.25 cents (1.1%) at $2.0565 per pound, having peaked at $2.0890—the highest level since 2022. Meanwhile, the May Robusta contract on LIFFE climbed to £2,195 per ton, its highest since 2023.

Why Arabica Prices Reached a Two-Year High

On the Intercontinental Exchange (ICE), the May Arabica contract gained 2.25 cents or 1.1%, closing at $2.0565 per pound. During the session, the price touched $2.0890—its strongest level in two years. This spike comes amid uneven rainfall across Brazil’s Arabica-growing regions. While some areas received much-needed rain, others stayed dry, with forecasts predicting below-average precipitation overall. That inconsistency threatens yields and supported the futures rally.

Robusta Also Climbs to a 12-Month High

Over at the London International Financial Futures and Options Exchange (LIFFE), the May Robusta contract rose 33 USD (1.5%), closing at 2,180 USD per ton. At one point during trading, it hit 2,195 USD—its highest price in a year. Unlike Arabica, Brazil’s Robusta-growing areas did not face the same drought pressure, but the broader market strength lifted prices across the board.

Cocoa Futures Also Jump on Supply Concerns

Both ICE and LIFFE cocoa contracts surged to multi-year highs. ICE’s May cocoa contract gained 22 USD (0.7%), closing at 3,006 USD per ton and hitting 3,027 USD—the highest since September 2011. LIFFE’s May cocoa contract rose 18 GBP (1%) to 1,878 GBP per ton. Analysts cited expectations of a global supply shortfall for the 2013/14 season, along with technical buying and stop orders above 3,000 USD on the ICE May contract, as key drivers.

Sugar Futures Dip Slightly

In contrast, ICE May raw sugar fell 0.19 cent (1%) to 18.03 cents per pound. LIFFE May white sugar also declined, down 7.10 USD (1.5%) to 471.00 USD per ton. These moves reflect a different supply-demand dynamic compared to the tight outlook for coffee and cocoa.

Frequently Asked Questions

Why did ICE Arabica coffee futures hit a two-year high?

ICE May Arabica coffee futures rose to $2.0890 per pound—the highest since 2022—due to uneven and below-average rainfall across key Brazilian Arabica-growing regions. Some areas lacked critical precipitation despite others receiving rain, raising concerns about crop yields and tightening supply.

How high did Robusta coffee futures go?

The LIFFE May Robusta coffee contract closed at $2,180 per ton, up 1.5%, and hit an intraday high of $2,195 per ton—the highest level in a year. Brazil’s Robusta regions were less affected by drought, but broader market strength drove the rally.

What caused the cocoa price surge?

ICE May cocoa rose to $3,006 per ton and touched $3,027—the highest since September 2011—while LIFFE May cocoa hit £1,878 per ton. Analysts pointed to expected global supply shortages for 2013/14, technical buying, and stop orders above $3,000 as main factors.

Did sugar futures also rise?

No. ICE May raw sugar fell 0.19 cent (1%) to 18.03 cents per pound, and LIFFE May white sugar dropped 7.10 USD (1.5%) to 471.00 USD per ton. These commodities moved differently compared to coffee and cocoa.

What does dry weather in Brazil mean for coffee prices?

Dry or erratic rainfall in Brazil’s coffee-growing regions can reduce yields and tighten future supplies, prompting traders to push futures prices higher as a risk premium.

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