The rise in coffee prices to nearly 50-year highs may continue for several years.

• Some analysts predict that the rally for coffee prices, which has set a new record, may continue for an extended period, with a warning that it could take years for the world's most traded commodity to recover.
• The dramatic price rise is attributed to drought, high temperatures, and a global dependence on supplies from limited regions.
• According to David Oxley, chief climate and commodities economist at Capital Economics, coffee prices will decrease only when supply increases and stocks are replenished, as history suggests.

Some analysts predict that the rally for coffee prices, which has set a new record, may continue for an extended period, with a warning that it could take years for the world's most traded commodity to recover.

On Tuesday, March delivery reached a new intraday high of 348.35 cents per pound, marking their highest level in nearly 50 years. Despite cutting some of their gains, the contract has still increased by an impressive 70% year-to-date.

In 1977, the last time the price for arabica beans traded that high, it was due to snow destroying large areas of Brazilian plantations.

Arabica beans, renowned for their smooth taste and sweet flavor, make up between 60% to 70% of the global coffee market and are commonly used in espressos and other barista-made coffee.

The recent price increase is attributed to drought, high temperatures, and a global dependence on supplies from limited regions.

In late November, Robusta futures reached a new record high. Robusta beans are renowned for their robust and bitter taste and are commonly utilized in instant coffee blends.

The price of coffee, the second-most traded commodity globally, has experienced a remarkable increase, despite worries about the 2025 crop in Brazil, its largest producer.

During August and September, the country suffered its worst drought in 70 years, followed by heavy rains in October, causing concerns that the flowering crop may fail, according to Ole Hansen, head of commodity strategy at Denmark's Saxo Bank, in a research note published Tuesday.

The unfavorable weather conditions in Brazil may prolong the process of coffee prices decreasing.

According to David Oxley, chief climate and commodities economist at Capital Economics, in a research note published on Nov. 29, history indicates that coffee prices will decrease only when supply increases and stocks are replenished.

This process can take years, not months, according to Oxley.

Coffee 'particularly vulnerable' to bad weather

Coffee consumption has surged globally, particularly in China, leading to increased demand. Despite this, production has faced challenges in meeting the growing needs.

Hansen of Saxo Bank stated that, like cocoa, coffee is primarily grown in a narrow tropical region, with significant producers being Brazil, Vietnam, Colombia, and Ethiopia.

He stated that the concentration of this product makes it highly susceptible to unfavorable weather conditions, particularly in Brazil and Vietnam, which contribute to about 56% of worldwide production.

According to the U.S. Department of Agriculture's semi-annual report from last month, it is predicted that Brazil's coffee production for the marketing year 2024/2025 will be 66.4 million bags, with 45.4 million bags of arabica and 21 million of robusta.

The USDA revised its forecast, predicting a 5.8% decline from its earlier projection. The agency attributed this decrease to unusual weather patterns that hindered crop growth, particularly affecting arabica trees.

Rabobank's head of agricultural commodities markets, Carlos Mera, stated via video call to CNBC that the fifth consecutive arabica harvest in Brazil will be disappointing due to adverse weather.

Coffee production may be at risk due to extreme weather, according to growing concerns within the industry.

Mera predicted that coffee prices may increase further from their current highs.

Price increases for coffee drinkers?

It is likely that coffee makers will increase the prices of their products to cover the higher cost of coffee beans, according to analysts.

Nestlé, the world's largest coffee maker, which owns leading brands such as Nescafé and Nespresso, announced last month that it would increase prices and reduce pack sizes to mitigate the effects of higher costs.

Our manufacturing costs have increased significantly due to the rise in coffee prices, resulting in a higher cost for our products, as stated by a Nestlé spokesperson via email to CNBC.

"We consistently improve efficiency while minimizing costs and maintaining our renowned quality and flavor," they stated.

When contacted by CNBC, both Lavazza, an Italian coffee maker, and Starbucks, a U.S. coffee giant, declined to provide any comment.