As reported by CNBC, coffee futures rose by 8.8% in March, to an average somewhere around $1.16 per pound. The reason for the spike is market uncertainty; indeed, we’ve seen this sort of price spike due to calamity in the past—it’s one of the only sources of significant increase the coffee market price sees, which is a surefire sign that the system is broken.
Coffee prices have rallied over the last month, as global lockdowns fueled panic buying by those stuck at home looking for a caffeine fix, but the outlook for the commodity is far from clear.
Since bottoming in early February, coffee futures prices on the ICE have risen by some 24%. This is in utter contrast to recent performances for other soft commodities in recent weeks, including sugar (down 13%), cocoa (down 10%) and cotton (down 14%).
In 2018, the price of coffee futures on the Intercontinental Exchange fell below the $1 per pound level for the first time in a dozen years when the price traded to a low of 92 cents. After a rebound to $1.2550 late in 2018, the price descended to a lower low of 86.35 cents per pound in April 2018, which was the lowest price since 2005.
Amid crashing equities and commodities, arabica coffee, the most-volatile raw material this year, posted a rally on a shortfall of high-grade beans favored by Starbucks Corp.