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Barchart
Barchart
Rich Asplund

Coffee Prices Rally as Global Supplies Tighten

December arabica coffee (KCZ25) on  Wednesday closed up +7.30 (+1.77%), and November ICE robusta coffee (RMX25) closed up +119 (+2.58%).

Coffee prices extended this week's rally on Wednesday to 5-week highs.  Coffee prices have support from shrinking ICE coffee inventories.  The 50% tariffs imposed on US imports from Brazil have led to a sharp drawdown in ICE coffee inventories.  ICE-monitored arabica inventories fell to a 19-month low of 465,910 bags on Wednesday, and ICE robusta coffee inventories fell to a 3-month low of 6,141 lots.  American buyers are voiding new contracts for purchases of Brazilian coffee beans due to the 50% tariffs imposed on US imports from Brazil, thereby tightening US supplies, as about a third of America's unroasted coffee comes from Brazil.

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