This week, the price of coffee traded to a new low at 91.25 cents per pound. While the price was just 0.75 cents lower than the September 2018 low, coffee futures had not traded below the $1 per pound level since 2006 before last August. At the lowest price in a dozen years, the price of coffee was on sale, and this week, the price got even less expensive which is good news for the many consumers around the world and bad news for coffee producers.
Many reasons have contributed to the price weakness in the coffee futures market. The dollar is the reserve currency of the world and the benchmark pricing mechanism for many commodities, and coffee beans are no exception. However, Brazil is the world’s leading producer and exporter of Arabica coffee beans, and weakness in their local currency softened the blow of lower dollar-based prices making the move below the $1 per pound level possible.