Photo: Getty images
Global prices for Arabica coffee have reached a historic high amid the threat of US duties on goods from Colombia and forecasts of a significant decline in global coffee stocks. This was reported by MarketWatch on Monday, 27 January.
Arabica futures rose 0.75% to $3.5015 per pound, and earlier in the day the price reached a record $3.5535 per pound, the highest level since data recording began in 1972.
US duties on Colombian goods
Tensions between the US and Colombia escalated after President Donald Trump instructed the administration to impose a 25% tariff on imports of goods from Colombia due to the government’s refusal to accept planes carrying deported illegal migrants. However, after concessions from Colombia, including an agreement to accept migrants, the White House said that the duties would not go into effect for now.
Colombia, which is the third largest coffee producer in the world and the second largest producer of Arabica, is at the centre of a geopolitical confrontation that directly affects the global coffee market.
Harvest concerns and coffee stocks
Over the past 12 months, the price of arabica has risen by 85%, driven by concerns about a weak harvest in key producing countries such as Brazil and Vietnam.
The US Department of Agriculture predicts that global coffee stocks will fall to their lowest level in 25 years in the 2024-2025 crop year. This raises the risk of further price increases and a shortage of coffee on the global market.
Coffee market outlook
The shortage of arabica is expected to affect prices for both large retailers and end consumers. Analysts predict that record prices may persist until production conditions in exporting countries improve and the political situation stabilises.
