Coffee and cocoa markets, which witnessed a record-breaking rally this year, are expected to see a correction in 2025 as global supply improves, according to a new Rabobank outlook report. The bank notes that bumper harvests across key producing regions are likely to create surpluses, reducing the upward pressure that pushed prices to historic highs in 2024.
Arabica coffee, which surged above $4 a pound earlier this year amid fears of reduced Brazilian output and the impact of US tariffs on South American shipments, is projected to stabilise between $2.50 and $3.50 a pound next year. Analysts, however, warn that short-term volatility may persist due to lingering weather concerns and ongoing geopolitical risks affecting global trade flows.
Cocoa, which has experienced sharp price spikes triggered by crop disease, climate stress, and supply disruptions in West Africa, is also anticipated to cool as new harvests enter the market. Rabobank expects improved yield conditions to ease the severe supply crunch that has defined the past two years.
While the broader correction suggests relief for global food inflation, Rabobank cautions that agricultural commodity markets remain highly sensitive to geopolitical tensions, shipping disruptions, and policy shifts impacting trade routes.
