Global Coffee Market Hits Record Highs

On Friday, the coffee market witnessed an unprecedented surge, with prices reaching an all-time high. The primary driver behind this spike is the Arabica beans, predominantly cultivated in nations such as Brazil, Colombia, Ethiopia, India, and Guatemala.

Supply Disruptions and Geopolitical Tensions

Brazil's coffee production has been severely impacted by unexpected frosts and droughts, leading to a significant disruption in supply. Meanwhile, Colombia's coffee sector is facing uncertainty due to ongoing geopolitical tensions. These factors, combined with escalating production costs including transportation and labor, have contributed to the sharp increase in coffee prices.

Trade Uncertainties Escalate

Adding to the market's volatility, the US government has imposed tariffs on key coffee-producing countries, further exacerbating trade uncertainties. This move has put additional pressure on the already strained coffee market.

As a result, coffee futures for March saw a 2.40% increase on Friday, selling at $4.13 per pound by 1:19 pm ET.