Coffee prices, which have been in a downward trend this year, have recently been recovering. Favorable climatic conditions in South America, tensions in the Middle East and the US’s removal of additional customs duties on Brazil were effective in the decline in coffee prices.
Increased freight and insurance costs due to the US/Israel-Iran War also led to the decline in coffee demand. With these developments, the pound of coffee decreased by 15 percent in the first half of the year. Recently, coffee prices have been on the rise due to concerns that global coffee stocks will decrease due to climatic factors.
Coffee prices, which started the year at $3.48, dropped to $2.38 in June due to the impact of these developments. Coffee prices, which increased from this level, completed June with an increase of 11.62 percent at $ 2.96. Coffee prices, which started July with an increase, reached 3.57 dollars yesterday, reaching a 6-month high. Coffee prices rose to $3.72 on January 28.
THE INCREASE IN AIR TEMPERATURES PREVENTS COFFEE TREES FROM BLOOMING
Futures and commodity markets expert Zafer Ergezen stated in his evaluation that El Niño started in June and that this weather phenomenon was felt especially in South America and Southeast Asia, and said, “The biggest reason for the increase in coffee prices is the increase in air temperatures and decrease in precipitation in Brazil and Vietnam.” he said.
Pointing out that there has been a decrease in precipitation, Ergezen said, “It was already within the expectations that the weather would be like this. Coffee is one of the leading products produced in both South America and Southeast Asia. Brazil is the world’s largest producer and exporter of “arabica” type coffee and Vietnam is the world’s largest producer and exporter of “robusta” type coffee. he said.
Ergezen stated that the rise in air temperatures in these countries prevents coffee trees from blooming.
Pointing out that the decrease in the flowering of coffee trees means that there will be a decrease in the yield, Ergezen said, “We see an increase in coffee prices due to these expectations. The El Niño effect is expected to continue until the first quarter of 2027. This raises the expectations for coffee prices for the next season.” he said.
Ergezen emphasized that for this reason, there was an inflow of money on the coffee side, and coffee positions through ETFs increased, and that this led to a recovery in prices.
