The world is overflowing with coffee beans, sending futures for the arabica variety to the worst weekly slump since 1998.
The glut is so bad that warehouses in Brazil, the world’s biggest grower and exporter, have never been this full. Trucks in the country’s coffee heartland are waiting days to unload cargo collected from a record crop. Prices in New York, the global benchmark, tumbled 14% this week.
Supplies are piling up just as demand remains weak. Arabica coffee is the smoother variety preferred by roasters like Starbucks Corp. With consumers still proving reluctant to head back to cafes and restaurants in droves, consumption for the premium beans is tepid. By contrast, robusta beans, used in instant coffee and at-home blends, are holding up a bit better.