MILAN – Coffee like gold: yesterday – Wednesday, 5 January 2025 – Arabica coffee futures hit another all-time high, this time surpassing the psychological threshold of $4 per pound. So did gold: the yellow metal also flew to new records driven by the trade war on tariffs, which is fuelling the race for safe haven assets. But the rally in the black bean was by far the most impressive.
In New York, the March contract soared 1,440 points to close at 397.75 cents (+3.8%), after breaking through the 400 cent barrier during trading to reach an intraday high of 401.10 cents.
This is the eleventh consecutive positive session for Ice Arabica. In less than two weeks, the New York benchmark has risen by more than 50 cents.
In London, the most active contract (May) was $98 higher at $5,646, with a slight contango on the March contract, which closed at $5,643 (+$85).
The ICE Arabica’s backwardation is very pronounced, with December 2027 at 232.65 cents.
In London, the backwardation from July onwards is much less pronounced. In fact, the farthest contract (September 2026) settled yesterday at $4,866, indicating lesser confidence in a medium to long-term price decline.
Despite rising retail prices, Brazilians are not giving up their cafezinho.
According to the Brazilian Coffee Industry Association (Abic), Brazil consumed 21.9 million bags between November 2023 and October 2024, an increase of 1.1% compared to the same period last year.
This consolidates Brazil’s position as the world’s second largest coffee consumer, behind the USA. According to NCA’s newly released US Coffee Outlook 2025, coffee consumption in the States hovers around 24 million bags.
It should be noted, however, that per capita consumption in Brazil was 6.26 kg, compared with 4.9 kg in the US over the same period.
Domestic consumption in Brazil grew despite very high price increases during the period, which led to a 60% rise in industry turnover, which reached a total of R$ 36.82 billion or $6.37 billion.
Despite the aforementioned price increases, Abic argues that the higher raw material costs have not yet been fully passed on to the consumer and that retail prices could see further adjustments in the order of +20-30%.
Price increases for coffee have far exceeded those for other products in the basic food basket, such as milk (+18.4%), rice (+15%) and soya oil (+26.6%).
