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of the country ’ s arabica crop , were 235 percent higher compared to the historical average at this time of year . Thereafter , Minas Gerais received no rainfall in April 2024 , with the region continuing to experience dryness throughout May too ; it is probable that this will damage Brazilian coffee crops .
Meanwhile , the drought conditions in Vietnam , the world ’ s largest producer of robusta coffee beans , may result in a 20 percent YoY decline in coffee production for the marketing year October 2023 – September 2024 , leading to the smallest coffee crop witnessed in the last four years .
What ’ s more , ongoing concerns relating to coffee supplies have triggered short covering of coffee by investors and traders . This has the potential to keep the commodity ’ s price elevated in the short term .
Coffee costs on the rise
The rise in coffee prices has not gone unnoticed . The recent surge has seen an increase in the cost of a range of products , with coffee shops and producers passing rising costs onto consumers . For example , coffeehouses in London are now charging customers more than £ 5 for a takeaway cup .
The primary factor driving increasing coffee prices is supply concerns in two key coffee-producing nations – Brazil and Vietnam . Together , these two countries account for 55 percent and 50 percent of global coffee production and exports , respectively .
In March 2024 , precipitation levels in Brazil ’ s Minas Gerais region , which accounts for an estimated 30 percent
Cocoa remains inflated
Although cocoa prices may have dropped in recent weeks – primarily due to delays in purchasing decisions by chocolate companies , as well as the arrival of the mid-cocoa crop from West Africa and the lack of liquidity in the market – the fundamentals of the cocoa market remain bullish . In fact , the market is expected to witness a deficit for the third year in a row for the marketing year October 2024 – September 2025 .
The surge in cocoa ’ s price is largely being driven by continued supply concerns in Ghana and the Ivory Coast – two of the leading cocoa producers in the world . This is having a significant impact on production as these two countries account for an estimated 70 percent of global cocoa output .
The main cause of the decline in regional cocoa production is the extreme weather conditions which have hit West
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