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Arabica Coffee Prices Soar Past $3.60 per Pound as Supply Tightens

Global arabica coffee prices surged past $3.60 per pound on Wednesday, hitting record highs as Brazil—the world’s largest producer—faces dwindling supply and uncertainty over its upcoming harvest.

According to market dealers, 70% to 80% of Brazil’s current arabica crop has already been sold, slowing new trades. The country supplies nearly half of the world’s arabica beans, a premium variety favored in high-quality roast and ground coffee blends. Although weather conditions have improved following last year’s severe drought, Brazil’s next crop is projected to be 4.4% smaller than the previous one, as per data from the Brazilian food supply agency Conab.

“Global coffee availability remains constrained,” noted HedgePoint Global Markets on Wednesday. “Sales of Vietnam’s robusta crop are progressing sluggishly, Central American and Colombian arabica beans are taking longer to reach the market, and Brazilian farmers are reluctant to offload additional stock.”

The ripple effects of Brazil’s supply strain are being felt across the coffee market. Arabica futures on the ICE exchange, a global benchmark for coffee pricing, briefly hit an all-time high of $3.6945 per pound before settling at $3.6655—marking a 2.5% increase on the day and a nearly 15% gain for the year. Meanwhile, robusta coffee, a lower-cost variety primarily used for instant coffee, climbed 0.9% to $5,609 per metric ton.

Adding to the market’s tightness, coffee exports from India—the world’s fifth-largest robusta producer—are expected to decline by over 10% in 2025 due to lower yields and reduced carryover stock from last season. Farmers in both India and Vietnam, the top robusta producer, are reportedly holding back sales, betting on further price increases. In Brazil, an estimated 80% to 90% of the current crop has already been sold, according to traders.

A report from brokerage firm Sucden highlights another pressing issue: Brazilian coffee growers are prioritizing domestic sales over dollar-denominated exports, despite higher international prices. This shift comes as local farmers’ financial positions have improved significantly in recent years. Moreover, Brazil’s coffee buffer stocks have plummeted to an estimated 500,000 bags—down sharply from the traditional 8 million—leaving the global market particularly vulnerable to any additional weather disruptions.

Sucden anticipates that the coffee market will log its fourth consecutive annual supply deficit this season, adding further upward pressure on prices.

Beyond coffee, other soft commodities saw notable movements. Raw sugar climbed 1.1% to 19.45 cents per pound, rebounding from a five-month low, while white sugar gained 2.2% to $522.90 per ton. Meanwhile, New York cocoa futures spiked 3.3% to $11,745 per ton, with London cocoa rising 1.6% to 9,138 pounds per ton.

EU Moderates Emissions While Sustaining Economic Momentum

The European Union witnessed a modest decline in greenhouse gas emissions in the second quarter of 2025, as reported by Eurostat. Emissions across the EU registered at 772 million tonnes of CO₂-equivalents, marking a 0.4 percent reduction from 775 million tonnes in the same period of 2024. Concurrently, the EU’s gross domestic product rose by 1.3 percent, reinforcing the ongoing decoupling between economic growth and environmental impact.

Sector-By-Sector Performance

Within the broader statistics on emissions by economic activity, the energy sector—specifically electricity, gas, steam, and air conditioning supply—experienced the most significant drop, declining by 2.9 percent. In comparison, the manufacturing sector and transportation and storage both achieved a 0.4 percent reduction. However, household emissions bucked the trend, increasing by 1.0 percent over the same period.

National Highlights And Notable Exceptions

Among EU member states, 12 reported a reduction in emissions, while 14 saw increases, and Estonia’s figures remained static. Notably, Slovenia, the Netherlands, and Finland recorded the most pronounced declines at 8.6 percent, 5.9 percent, and 4.2 percent respectively. Of the 12 countries reducing emissions, three—Finland, Germany, and Luxembourg—also experienced a contraction in GDP growth.

Dual Achievement: Environmental And Economic Goals

In an encouraging development, nine member states, including Cyprus, managed to lower their emissions while maintaining economic expansion. This dual achievement—reducing environmental impact while fostering economic activity—is a trend that has increasingly influenced EU climate policies. Other nations that successfully balanced these outcomes include Austria, Denmark, France, Italy, the Netherlands, Romania, Slovenia, and Sweden.

Conclusion

As the EU continues to navigate its climate commitments, these quarterly insights underscore a gradual yet significant shift toward balancing emissions reductions with robust economic growth. The evolving landscape highlights the critical need for sustainable strategies that not only mitigate environmental risks but also invigorate economic resilience.

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