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– Your cup of coffee is set to get even pricier as persistent supply disruptions push costs for premium Arabica beans to the highest in 13 years. Futures surged as much as 4.8 per cent to US$2.718 a pound in New York on Sept 16, the highest since 2011. Prices are up roughly 40 per cent in 2024 as shortages of the cheaper Robusta beans stoke demand for the Arabica variety favoured by specialty chains. Robusta prices too have rallied for over a week, jumping as much as 4.2 per cent on Sept 16. Coffee’s rally has been gathering pace from ongoing concerns about harsh weather in top producer Brazil. The nation is wrapping up its 2024 to 2025 harvest and production prospects weakened after heat and dryness hurt fields. “It’s all about the weather,” said ED&F Man head of research Kona Haque, pointing to the conditions in Brazil’s main coffee growing regions and a lack of rain forecast for the next fortnight. Attention is now shifting to next season’s potential, and the South American nation has been gripped by its worst drought in decades, threatening further crop damage. “The potential of the 2025 to 2026 Arabica crop is hanging by a thread,” said Rabobank analyst Carlos Mera. Rainfall in Arabica-growing areas has been consistently below normal levels since the start of the dry season in April, he said. “This problem comes at a time when the coffee industry is suffering from port congestion in several countries, global scarcity of containers, disruptions around the Red Sea, and also disappointing crops in Vietnam.” Across the supply chain, the impact of 2024’s rally is already evident. J.M. Smucker, whose brands including Folgers and Cafe Bustelo dominate the United States’ at-home coffee market, increased its prices earlier this summer and in August announced further hikes in early October. Restaurant chain Pret A Manger scrapped its British coffee subscription that gave customers as many as five drinks per day. Coffee’s advance is adding to inflation across the beverage aisle. Orange juice prices have also spiked due to production shortfalls and a record run-up in cocoa futures is boosting costs for chocolate drinks and desserts. Still, prices for other major staples – like grains – remain subdued, tempering overall food inflation. BLOOMBERG