Coffee Prices Reach Unprecedented Levels

On a notable Friday, the global coffee market witnessed a significant surge in prices, setting a new all-time high. This remarkable increase is primarily attributed to Arabica beans, which are predominantly cultivated in countries such as Brazil, Colombia, Ethiopia, India, and Guatemala.

Factors Behind the Surge

Several factors have contributed to this dramatic rise in coffee prices. In Brazil, unexpected climatic conditions like frosts and droughts have severely impacted the supply chain. Meanwhile, geopolitical tensions in Colombia have added a layer of uncertainty to the market. Additionally, the escalation in production costs, including transportation and labor, has further fueled the price hikes. The situation is compounded by the US government's use of tariffs as a strategic tool against key coffee-producing nations, intensifying trade uncertainties.

Market Response

As a direct consequence of these developments, coffee futures for March experienced a 2.40% increase on Friday, reaching $4.13 per pound by 1:19 pm ET.