• big companies trade 12 million bags per year¹⁾

For both commodities, extreme weather and shortages fueled rallies. And, like cocoa, coffee production is concentrated in two countries. Soaring prices have also squeezed traders and forced them out of the market.¹⁾

A bag weighs 60 kilograms.

Arabica's coffee premium to robusta dropped to around US$661/t on Friday (the lowest since May 2019) amid diverging fundamentals between the two types of coffee. There are expectations that the arabica harvest will encounter a supply surplus while robusta coffee will see a fourth consecutive year of deficit for the 2024/25 season. Recent reports suggest that upcoming dry EI-Nino weather conditions in Southeast Asian countries have raised concerns about robusta coffee harvest.²⁾

But as Bloomberg Opinion’s Javier Blas argues, left unsaid is a notable development that’s reshaping the coffee market: China is now developing a strong taste for the beverage, heralding an era when prices probably will be higher for longer than in the past.³⁾