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Coffee futures jumped on Monday as a supply shortage in the largest producer drove up the prices.

Coffee futures climbed nearly 7% Monday to $1.3895 a pound, the biggest one-day surge since 2015. Prices have soared a whopping 38% this year. Prices are at a three-year high.

“Very, very expensive prices out of the origins,” said Rodrigo Costa, director of trading at Comexim USA. “This year we are running a deficit. Brazil, the largest producer, is producing less coffee. Brazil has [a] bi-annual crop cycle, so there’s always an on year and off year. The year before we had a record crop.”

Brazil and other South American and Latin American producers have been dealing with less rain this year, hurting the coffee crop.

“The demand has stayed quite strong. People had gotten too relaxed thinking the market would stay low for a long time. The consumption seems to be very healthy and that created a bit anxiety in the market,” Costa said.

Latest data from the ICE showed inventories of Brazilian coffee in its warehouses dropped to only 975 bags by Monday, compared to 2 million bags in total.

Jeff Kilburg, CEO of KKM Financial, said “there’s a panic” in the coffee futures market. “There’s concern that a lot of the farmers who sold their coffee through futures are not going to be able to deliver on the underlying products.”

— CNBC’s Fred Imbert contributed reporting.

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