New York: Coffee futures climbed to a fresh record high in New York on mounting concerns over US tariffs and constrained supplies, signaling potential further price hikes for cafes and supermarket shelves.
Arabica coffee, the variety favored by specialty chains like Starbucks Corp., surged 4.1% to an all-time high of $4.3795 a pound, surpassing the previous record of $4.2995 set in February amid fears of weather disruptions in top producer Brazil. Since early August, arabica futures have risen roughly 50%, fueled by tariffs, an inverted market structure, and rapidly dwindling inventories in exchange-monitored warehouses.
“We’re in a circumstance where basically every roaster in the states is just waiting to see when there’s going to be a better market to book coffee at,” said Sam Klein, a green coffee buyer at Partners Coffee. “Even if people aren’t feeling great about the direction the market’s going to go in, it also doesn’t feel great to book a year’s worth of coffee at a historically high level.”
Tariffs and Market Dynamics
The steep rally is partly due to US President Donald Trump’s 50% tariffs on Brazilian beans, which took effect in August, causing trade between the two countries to largely stall. Trump also recently threatened new fees on Colombian coffee. With Brazil and Colombia being the US’s top coffee suppliers, these measures risk further price pain for American consumers already paying record prices.
The market’s inverted structure, where current contracts are priced higher than future ones, has discouraged trade. Importers are hesitant to buy expensive beans for fear of financial loss if they cannot sell immediately, while tariffs further reduce their incentive to bring coffee to the US market, explained Tomas Araujo, senior trader at StoneX.
“There is coffee, but it’s in the wrong place. It’s all in origin, and it needs to be in destination,” Araujo noted.
Supply and Inventory Challenges
Coffee inventories are at their lowest levels since early 2024, with Brazilian stockpiles at record lows. Market players—from importers to roasters—are holding very small amounts of inventory, creating “super high demand” for near-term supplies.
The last record surge in February saw a cash crunch, as importers struggled to finance margin calls, leading exporters to discount beans to move them to consuming countries. Current market conditions could trigger similar activity.
Some Brazilian coffee prices have softened, potentially allowing profitable deliveries to the futures exchange, though December futures contracts remain a challenge, said Joseph Centorino, VP of finance and operations at Pan American Coffee. The Intercontinental Exchange will also raise premiums for beans from Colombia, Kenya, and Costa Rica in the March 2026 arabica contract, which may encourage more deliveries.
“Origin stocks are healthy, but unless producers start selling or merchants and roasters begin buying, the supply remains stuck, and coffee there doesn’t fill up our morning cups here,” Centorino said.
Current Prices and Market Movements
Arabica coffee: up 0.75% to 424.00 cents per pound in New York
Robusta coffee: down 1.4% in London
The premium of arabica over robusta surged to approximately 215 cents per pound, marking the widest gap since 2008.
Coffee Futures Hit Record High Amid US Tariffs And Supply Concerns, Risking Price Hikes For Consumers
