Khaberni - Future coffee contracts on the Intercontinental Exchange have risen as traders worry about escalating tensions between the United States and Colombia, the world’s third largest coffee producer.
Arabica coffee climbed 1.8%, to $4.1355 per pound at settlement yesterday, Tuesday, after having closed up 2.2% the previous day, Monday.
Colombia recalled its ambassador from Washington after U.S. President Donald Trump said he would raise tariffs on the South American country and stop all aids to it.
The United States, the world’s largest coffee consumer, currently imposes a 10% tariff on imports from Colombia, sourcing about a fifth of its coffee needs from Colombia and about a third from Brazil, the world's largest coffee producer.
This tension between the United States and Colombia comes as traders eagerly await news on trade negotiations between the United States and Brazil.
Last week, the two sides agreed to schedule a meeting between Trump and his Brazilian counterpart, Luiz Inácio Lula da Silva, "as soon as possible".
Any reduction in the current 50% U.S. tariffs on Brazilian imports, including coffee, will be seen as negative pressure on prices.
The price of Robusta coffee rose 2.5% to $4,574 per ton.
