Global coffee prices jump 157% in 16 months .. “Arabica” most affected by fires in Brazil

A monitoring by (Maaal) revealed that coffee prices in global markets rose by about 157% during the last 16 months to record their highest historical levels against the backdrop of expectations of a decline in exports from Brazil – the largest export producer in the world – as a result of heat waves, drought and fires that occurred in its growing areas during the past summer, which cast their shadows on supply in global markets with the continued growth of demand from China, while prices locally are witnessing stability and an abundance of supply. According to the monitoring, the series of increases in the prices of Arabica coffee – which accounts for three-quarters of the world’s coffee production and consumption – began in October 2023, when it recorded a price of $3,287 per ton without shipping costs, to continue its gradual and strong rise during the year 2024, continuing the leaps in January 2025, reaching a price of $8,481 per ton at its highest historical level, with an increase of $5,164 per ton, an increase of 157%. While the monitoring data shows that the prices of Robusta coffee – which accounts for a quarter of the world’s coffee production and consumption – recorded a series of increases from a price of $2,481 per ton without shipping in October 2023, to continue its gradual and strong rise during the year 2024, until the end of January 2025, recording a price of $5,734 per ton, also at its highest historical level, with an increase of $3,097 per ton, an increase of 126%. The strong rise in Arabica coffee prices is due to what happened in the state of Minas Gerais in Brazil, which produces about 30% of the Brazilian Arabica crop, as it witnessed a significant decrease in rainfall amounts that extended throughout the months of 2024, causing Brazil to record the worst drought wave it has been exposed to since 1981, which raised concerns about the impact on the Brazilian coffee crop this year, as Brazil provides more than a third of the world’s coffee supplies and is the main source of sweet Arabica beans. In terms of global demand for both types of coffee, monitoring data shows a continuous increase in Chinese consumption, which jumped by 150% over the past ten years, reaching (6.3) million tons in 2024, compared to a local production that did not exceed (2) million tons, with Chinese imports putting significant pressure on global prices in recent months. Locally, data from the General Authority for Statistics shows relative stability in coffee prices in the local market, as coffee prices (grain/hari) recorded about 45.7 riyals per kilo in December 2024 compared to about 44.9 riyals per ton at the end of 2023, meaning that its prices increased during the year by only about 1.8%. Meanwhile, coffee prices (grain/loaf) decreased last December to 31.1 riyals per ton compared to 32.3 riyals per ton at the end of 2023, a decrease of 3.8%. The Kingdom imported about 107 thousand tons of coffee beans during the year 2023, and according to the Saudi Rural Program of the Ministry of Environment, Water and Agriculture, the volume of Saudi coffee production in the year 2023 exceeded about 1,485 tons, an increase of 37%, as the program aims, through financial support and development, to raise production to 7 thousand tons by the year 2026, through the support it provides to the sector, after the program’s support for the sector since its launch reached 61 million riyals, while the number of beneficiaries reached 3,718 beneficiaries. Yesterday, the “Coffee Cooperative” in Jazan began exporting the first shipment of Saudi coffee grown in the farms of Al-Dayer Governorate to Belgium, Eastern Europe, coinciding with the Saudi Coffee International Exhibition 2025, as part of its plan to enhance the position of Saudi coffee in global markets. The Kingdom imports about 58% of its coffee imports from Ethiopia, 15% from Brazil, and 3% from India. Therefore, the impact of the rise in Brazilian coffee prices did not have a significant impact on its local prices due to reliance on imports from Ethiopia.