Unprecedented Surge in Coffee Prices

On Friday, the coffee market witnessed an unprecedented surge, with prices reaching an all-time high. This significant increase is attributed to a combination of geopolitical tensions, supply disruptions, and rising production costs.

Impact of Weather and Geopolitical Issues

In Brazil, unexpected frosts and droughts have severely impacted the supply of Arabica beans, which are primarily grown in countries such as Brazil, Colombia, Ethiopia, India, and Guatemala. Additionally, geopolitical tensions in Colombia have introduced further uncertainty into the market.

Rising Costs and Trade Uncertainties

The cost of production, including transportation and labor, has been on the rise, contributing to the price hikes. Moreover, the US government's use of tariffs as a tool to threaten key coffee-producing nations has escalated trade uncertainties, adding pressure to the already volatile market.

As of 1:19 pm ET on Friday, coffee futures for March climbed 2.40%, selling at $4.13 per pound.