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On December 5, 2023, arabica coffee prices rose by 2.45%, reaching +9.20, while robusta coffee increased by 5.00% with a gain of +210. This rise in prices comes amid the backdrop of a 50% tariff on US imports of Brazilian coffee, causing a significant drop in ICE coffee inventories. Arabica inventories plummeted to a 1.5-year low of 569,937 bags, while robusta stocks fell to a 2.25-month low of 6,450 lots.
In addition, American buyers are currently avoiding new contracts for Brazilian coffee due to the tariffs, creating tighter supply conditions in the US, which sources about one-third of its unroasted coffee from Brazil. The National Oceanic and Atmospheric Administration also indicated an increased likelihood of a La Niña weather pattern, potentially impacting Brazil’s upcoming coffee crops, which is crucial given that Brazil is the world’s largest arabica coffee producer.
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