Unprecedented Surge in Coffee Prices

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

Impact of Weather and Geopolitical Factors

Arabica beans, primarily cultivated in Brazil, Colombia, Ethiopia, India, and Guatemala, are at the heart of this surge. Brazil's coffee production has been severely impacted by unexpected frosts and droughts, leading to a disrupted supply chain. Meanwhile, geopolitical tensions in Colombia have added a layer of uncertainty to the market.

Rising Costs and Trade Uncertainties

Additionally, the coffee industry is facing rising production costs, including increased expenses for transportation and labor. The US government's use of tariffs as a tool to pressure key coffee-producing nations has further escalated trade uncertainties, contributing to the price hikes.

Market Update: Coffee futures for March climbed 2.40% on Friday to sell at $4.13 per pound at 1:19 pm ET.