Coffee prices surge to highest since 1997 on supply fears

Coffee futures in New York climbed to the highest since 1997 on worries about crops in top growers, threatening to further raise costs for roasters an...

Coffee futures in New York climbed to the highest since 1997 on worries about crops in top growers, threatening to further raise costs for roasters and consumers.

Arabica, the high-end variety favored for specialty brews, rose as much as 3% on Monday. Coffee prices have soared this year due to major supply disruptions in key producers from Brazil to Vietnam, with the more budget-friendly robusta type that’s used in instant drinks recently hitting the highest since the 1970s.

Concerns have mounted that supplies from Brazil will slow after a long drought that hurt coffee trees, which may reduce next season’s output.

The potential for next years’ harvest "has certainly been impacted by the long dry and hot period that affected arabica coffee crops until September,” Rabobank analyst Guilherme Morya wrote in a report.

That’s true even after rains in October led to an "excellent flowering” of the trees, Morya added. There are now fears that the flowers will not fixate on branches, putting the crop in danger as flowers later develop into the cherries that contain the beans.