Welcome to our latest edition of Market Watch! Andrew Blyth & Tom McLaughlin are here to provide you with the latest insight into what’s happening with specialty coffee prices as of March 2024.

The 2024 rollercoaster ride of specialty coffee prices

The first few months of 2024 have seen coffee prices on a rollercoaster of sorts. Futures prices hit a low of $1.7310 on January 18th and then traded as high as $1.9475 on March 7th. Uncertainty about the size of Brazil’s upcoming summer crop has only added to this volatility. Additionally, unusually high temperatures and lack of timely rains in Brazil over the past few months have led many to believe this upcoming crop could be compromised. Early estimates for the size of the 2024/25 crop were over 70 million bags, which would be a record high. However, recent estimates from Stone X and Safras y Marcado put the crop at 67 and 70 million bags, respectively.

Honduras’s February coffee exports were 932,678 bags, up 26% year over year. In Colombia, coffee production seems to be stabilizing after a few years of lower numbers due to excessive rainfall. According to Cecafe, Brazil has exported 20,621,101 bags of coffee over the last 5 months (October ’23 – February ’24). The only 5-month span where Brazil had higher exports was August – December in 2020 when the country exported 21,489,625 bags following a record harvest. All in all, there do not appear to be many supply issues with arabica coffee as of March ’24.

So, why the high specialty coffee prices?

Although there does not seem to be a shortage of arabica coffee, the robusta market tells a different story with prices currently trading at 30-year highs. This is due in part to 2 years of weather issues in Vietnam and Indonesia, the two major robusta producers that are causing robusta production to be 10-20% less than normal. Moreover, conflict in the Middle East has led to shipping delays with coffee in Asia. Robusta coffee users are left scrambling, pushing robusta prices even higher. While we don’t spend a lot of time discussing robusta in our world of specialty coffee, it seems to have an influence on the arabica market.

What does this mean for you?

Moving on from market influences and export metrics, what does all of this mean in practical terms? It means that while current market levels are not great, they are also nowhere near the highest we’ve ever seen. One could make the argument that with a cost of living or inflationary adjustment, the market deserves to be at or near these levels. In our opinion, the market is at a decent enough level, so it’s time to focus on the exciting part of buying coffee: what’s fresh?

It’s time for the beginning of new crop Central America season with sourcing in full swing for macro, micro, and experimental lots of all kinds! It’s the time of year to shop, plan, sample, and reserve the coffees that are most critical to your offerings menu. It’s time to connect with farmers, co-ops, and your favorite traders at Royal New York to source and purchase the freshest washed milds from Costa Rica, Guatemala, Honduras, El Salvador, and more.

Check the website for upcoming arrivals. Give us a call so we can recommend our favorites. Let’s get excited about new, recent, and soon-to-arrive coffees!

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