Arabica coffee futures surged to $4.24/lb on Tuesday, nearing an all-time high, driven by US tariffs on Brazilian imports and dry weather in Brazil threatening crop yields, according to Reuters. Prices later fell slightly as investors took profits, closing at $4.0935/lb. Brazil, which supplies 30% of US coffee, was hit with a 50% tariff on all goods, including green coffee, by the Trump administration in July, disrupting the supply chain and sending prices higher. With imports drying up, US roasters are scrambling for inventory, while American coffee farmers see a rare business opportunity. Speculators are fueling the rally as producers unwind hedges to avoid high margin costs. They write:
Prices for coffee futures traded in the Intercontinental Exchange in New York approached an all-time high on Tuesday as the market continues to climb amid the U.S. tariffs and a dry September in Brazil, which could hurt production.
Arabica coffee futures earlier rose to a session high of $4.24 per pound, a seven-month top and not far from the all-time peak of $4.29 per pound for the most liquid contract hit earlier this year. […]
Prices for arabica coffee, the mild variety mostly used by coffee chains such as Starbucksย (SBUX.O), opens new tabย and Dunkin Donuts, have jumped around 50% at ICE since the Trump administration applied aย 50% tariff on Brazilian imports at the end of July, including green coffee. […]
In other soft commodites, London cocoa fell 2.1% to 5,107 pounds per ton, while New York cocoa โโlost 3.6% to $7,371 a ton.
Raw sugar โโsettled down 0.6% at 15.90 cents per lb, while white sugar โโwas little changed at $465.80/ton.
From Citrus to Coffee: Californiaโs Bold New Crop
Southern California is becoming a new hub for premium coffee production, with farms like Hobson and FRINJ leading the way, according to STiR Global Business Insights on Coffee and Tea. Unique climate conditions and high farming standards have made it possible to grow elite varieties like Gesha. With support from Blue Bottle Coffee and rising demand, the region is earning the title โNapa Valley of Coffee,โ offering a high-end, sustainable alternative as global coffee regions face climate challenges. They write:
California has long been renowned for its vibrant cafรฉ scene, from the third-wave coffee movement pioneers in San Francisco to the trendsetting specialty shops of Los Angeles. Yet the idea of California-grown coffee has, until recently, seemed as foreign as snow on its sun-drenched beaches. This perception is rapidly changing as Southern California emerges as a promising coffee-growing region in America, earning it the moniker “The Napa of Coffee” among industry insiders.
Historically, coffee has never grown this far from the equator. However, Southern California’s unique microclimate creates conditions that are remarkably similar to those found in some of the premium coffee-growing regions worldwide. This is not just a novelty, it’s transformative for American coffee culture which, until now, had to rely on Hawaii and Puerto Rico for domestic production. […]
โWe sold out our first lot in less than one business day! Maybe we are not crazy to think that California coffee has a future,โ saysย Dave Armstrong, CEO atย Hobson Family Farms. […]
For coffee enthusiasts seeking America’s most exciting new origin, the road now leads not only to Hawaii’s established farms but to the coastal slopes of Southern California, where a new chapter in American coffee production is being written one exceptional bean at a time.
