Coffee prices have risen to a 10-year high, and analysts expect the market to remain tight through 2023.
December coffee contracts ended Monday’s trading session at $2.34 per pound. Coffee futures on the New York Intercontinental Exchange reached $2.46 per pound on Thursday, the highest price since 2011, when the commodity surpassed $3 per pound.
Meanwhile, the benchmark price for coffee set by the International Coffee Association was $2.07 per pound on Friday, up 85 percent from a year ago.
Ole Hansen, head of commodity strategy at Saxo Bank, told CNBC that “a perfect storm of events” has conspired to boost the price of the beloved bean over the last 12 months.
“For future price action, the key question is how much of these developments are potentially longer-lasting,” he said in a phone interview. “I believe we should focus on what has occurred in Brazil this year, where we’ve seen a generational low in temperatures, a brief period of frost that hit some of the growing areas, and a period of drought – all of which have put the 2022 crop in a precarious position.”