"Global coffee is about to run out"! The situation in Brazil worsens, and Arabica coffee futures prices hit a record high

Due to severe weather in Brazil, the world's largest coffee producer, a serious supply crisis is brewing, pushing Arabica coffee futures prices to historic highs and raising concerns about a potential long-term shortage in global coffee supply.

On Friday, Arabica coffee futures prices in the New York market rose nearly 4%, reaching $4.36 per pound, setting a new record high. The previous record was $4.2995 per pound set in February this year, when the market had already begun to worry about a potential reduction in exports from Brazil, the top producing country.

The direct cause of this price surge is renewed market concerns that Brazil's severe weather conditions may significantly impact its exports. Arabica coffee beans are the high-end variety used by mainstream chain brands such as Starbucks and Dunkin'.

Market observers warn that the world is facing an "unprecedented" supply gap, with recovery potentially not occurring until 2029 to 2030, putting immense pressure on the upcoming winter consumption season in the Northern Hemisphere and indicating that prices may rise further in the future.

Brazil's Supply Crisis Continues to Worsen

Brazil's supply issues are becoming increasingly severe. Independent coffee market journalist and founder of SpillingTheBeans, Maja Wallengren, has repeatedly warned on social media platform X this week that the "bad news" from Brazil is continuing to worsen.

She pointed out that ongoing "severe drought" and "extreme high temperatures" are impacting the flowering and fruiting of coffee trees. After the first flowering of the 2026 coffee crop failed to produce enough fruit, the market had hoped that the second flowering would compensate, but the current severe weather is "destroying all hope." As early as mid-August, Wallengren warned in a report that the "frost damage" affecting key production areas, including the entire Cerrado Mineiro region and parts of southern Minas, could deal a "fatal blow" to the 2026 harvest.

Brazil's crop predicament is rapidly transforming into a global supply shortage. According to information provided by Wallengren, due to crop issues, Brazil's coffee export volume has been in a "near free fall" state this year, decreasing by about 8 to 9 million bags compared to the same period last year.

Meanwhile, importing countries are also facing tight inventories. Information shows that the current coffee stocks at major importing ports are only sufficient to last 3 to 4 weeks, with most of it in Europe, while the U.S. market is facing a physical supply shortage. Wallengren described this situation as an "unprecedented supply gap," a phenomenon not seen in the history of commercial coffee exports for over 315 years. She stated:

"The world is running out of coffee!"

Market Outlook: Prices Still Have Room to Rise

Looking ahead, market fundamentals suggest that prices may continue to rise. Analysts believe that **as the Northern Hemisphere enters the critical winter consumption peak, the demand for physical coffee beans will become more urgent, further exposing the severity of the supply shortage **

Wallengren believes that any external factors (such as changes in tariff policies) will have a temporary impact on the market, as "coffee is simply not there." She emphasizes that business entities like roasters ultimately need to make physical deliveries to maintain operations, as paper contracts cannot be roasted. At that time, the fundamentals of scarcity will dominate the market.

She expects that even if futures prices experience a temporary pullback, the actual coffee trading prices will be pushed up to the range of $5 to $6 per pound through premiums. Because in situations of extreme supply scarcity, no one would expect growers to sell their crops below market prices. The core logic is: when supply is nonexistent, price increases are an inevitable result, and hopes for a supply recovery will not come until at least 2029-2030