The price of Arabica (high-quality) coffee has shot up by 60% since the start of 2014. That’s due to a drought in Brazil, which accounts for a third of overall production. The driest January and February for 30 years will squeeze output.
Yet, the sharp rise in prices is an overreaction and should reverse before too long, reckons Commerzbank. Last year global production hit a 24-year high and demand has not kept pace, so stockpiles remain healthy.