Coffee prices climbed sharply on global markets, driven by concerns over supply disruptions linked to geopolitical tensions and adverse weather conditions in key producing regions.
Arabica coffee futures rose as much as 3.1% in New York, marking their biggest increase in two weeks, amid fears that instability in the Middle East could keep supply chain costs elevated. The price later settled at around $2.883 per pound, up 2% on the day. Robusta coffee also climbed, gaining 2.9% in London.
Geopolitics and energy costs drive prices
Market analysts point to the ongoing conflict in the Middle East as a key factor supporting higher prices. While an extended ceasefire between the United States and Iran has reduced the immediate risk of escalation, uncertainty remains over the reopening of the Strait of Hormuz—a critical route for global oil and gas shipments.
Higher energy prices are expected to increase transportation and logistics costs across agricultural markets, including coffee, which relies heavily on fuel-intensive supply chains.
Supply concerns deepen
The impact of geopolitical tensions is compounded by declining certified stock levels for both Arabica and Robusta beans, further tightening supply.
At the same time, weather conditions in Brazil—the world’s largest coffee producer—are raising additional concerns. Prolonged drought is threatening crop yields, while the strengthening of the Brazilian real is discouraging exports, further limiting global availability.
Other agricultural commodities are also seeing upward pressure, with cocoa and raw sugar prices rising in New York trading.
