Since the start of the year, the price of Arabica has recorded a spectacular increase of around 75%, with a session high reached on Friday at 335 cents per pound.
Coffee prices soared this week, with the price of a pound of Arabica trading at its highest since 1977, due to concerns over production in Brazil and growing climate uncertainties.
Since the start of the year, the price of Arabica has recorded a spectacular increase of around 75%, with a session high reached on Friday at 335 cents per pound.
This increase is largely “linked to concerns about the harvest” next year which can be explained by a historic drought this summer in Brazil, the leading producer of coffee and in particular arabica, underlines Carsten Fritsch, analyst at Commerzbank.
The climate has significantly disrupted coffee production in recent years, “both in terms of the quality and quantity of the harvest,” explains Guilherme Moryan, analyst at Rabobank.
In recent years, “Brazil has experienced an increase in the frequency of extreme weather events, such as frosts and heat waves,” recalls the analyst. These climatic uncertainties are manifested by greater volatility in coffee prices and significant speculation.
“Coffee producers in Brazil are delaying their sales for the upcoming harvest” because they expect even higher prices, reports Carsten Fritsch, for example.
Because coffee is “grown in a relatively narrow tropical band”, with a few key producers such as Brazil, Vietnam, Colombia and Ethiopia, it is all the more vulnerable to weather events in these regions, notes Ole Hansen, Saxobank analyst.
Other factors, geopolitical this time, such as disruptions to maritime transport in the Red Sea, customs duties promised by Donald Trump and uncertainties surrounding the future European Union regulation on deforestation are helping to support commodity prices. raw materials in general.
Friday, around 3:10 p.m. GMT (4:10 p.m. in Paris) on ICE Futures US in New York, the pound of arabica for delivery in March was worth 322.60 cents, compared to 302.10 cents seven days earlier.
On the London Liffe, a tonne of robusta for delivery in January traded at 5,487 dollars against 4,985 dollars a week earlier at the close.
Gold bends
The price of gold has not recovered this week from its brutal fall on Monday, caused by the announcement of a ceasefire agreement, signed on Tuesday, between Israel and the Hezbollah militia in Lebanon.
This prospect, which materialized on Wednesday with the entry into force of the truce, caused a fall in prices on Monday, with traders fearing “a reduction in demand for gold as a safe haven”, reports Carsten Fritsch, of Commerzbank.
This agreement came after more than a year of cross-border clashes between the Israeli army and the Lebanese Islamist movement, which turned into open war in the second half of September, displacing 900,000 people in Lebanon and 60,000 in the northern Israel.
Over the rest of the week, gold only partially made up for its heavy losses, with geopolitical risk persisting, notes Han Tan, Exinity analyst, in a note to AFP.
Despite the ceasefire, the Israeli army announced Thursday that it had carried out an airstrike against a Hezbollah installation in southern Lebanon.
Israeli forces are also carrying out a major offensive in the Gaza Strip. The Hamas government’s Health Ministry for Gaza announced Friday a new toll of 44,363 deaths in the Palestinian territory for more than a year.
Gold was also supported by “the weakening of the US dollar”, sparked by a strengthening of “bets on a quarter of a percentage point rate cut by the Federal Reserve at its December meeting”, notes the analyst.
However, the yellow metal usually competes for the favor of investors against the dollar and government bonds.
On Friday, an ounce of gold traded at $2,656.70, compared to $2,716.19 seven days earlier at the close.
The sluggish copper
The price of copper is not moving this week, like other industrial metals, putting an end to the fall it has experienced since the election of Donald Trump to the White House.
“The prospect of American customs duties, particularly on China, and Trump’s positioning on renewable energies” have recently weighed on copper, with the metal falling below $9,000 per tonne, explain UBS analysts.
But, they add, the increase in global demand for copper due to the energy transition “will continue” in 2025, with a supply deficit of 250,000 tonnes expected.
The properties of copper, in particular its high conductivity, make it a key metal for the energy transition, notably involved in the composition of electric vehicle batteries.
On the LME, a tonne of copper cost $9,023, compared to $8,968 seven days earlier at the close.
