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MILAN – Arabica coffee futures continued their upward trend yesterday, closing above the $4 threshold for the first time in over a month. On Monday 20 October, the contract for December delivery of the ICE Arabica gained a further 860 points (+2.2%), ending the first session of the week at 406.05 cents, its highest level since mid-September. Sentiment continues to be affected by uncertainty about the weather in Brazil and low stock levels.
However, financial and political factors are also having an impact, with the real recovering against the dollar and the threat of new punitive US tariffs, this time against Colombia, the world’s second largest exporter of Arabica coffee and the world’s leading exporter of washed Arabica.
In fact, there is now an open diplomatic crisis between the US and Colombia following Donald Trump’s statements accusing the Colombian President Gustavo Petro of being an “an illegal drug leader strongly encouraging the massive production of drugs.”
Petro responded by saying Trump was “rude and ignorant” toward the South American nation.
The Colombian Foreign Ministry called the American president’s comments offensive and unacceptable, and Petro recalled his ambassador to the United States “for consultations,”.
The U.S. president said on social media that the United States would stop large-scale payments and subsidies to Colombia and Republican Senator Lindsey Graham of South Carolina, a close ally, said Trump will soon announce “major tariffs” on the country.
The threat to cut off aid marks the latest point of tension between the two nations, despite historically Colombia being one of the US’s closest allies in Latin America.
Last month, the United States revoked Petro’s visa after he joined a pro-Palestinian demonstration in New York and urged U.S. soldiers to disobey Trump’s orders.
Tensions between Petro and Trump have been growing after the US deployed warships in the Caribbean and launched missiles to destroy vessels it claimed were trafficking drugs.
On Saturday 18 October, President Petro demanded a formal explanation from the US government on the the killing of a fisherman in Colombian territorial waters on 16 September. The Colombian president was categorical in emphasising the responsibility of the United States.
“US government officials committed murder and violated our sovereignty,” he said.
“Fisherman Alejandro Carranza – that was the victim’s name – had no ties to the drug trade and his daily activity was fishing. The Colombian boat was adrift and had its distress signal up due to an engine failure.”
Colombia, formerly one of the main beneficiaries of US aid in the Western Hemisphere, has already seen funding cuts this year due to the closure of USAID, the US government’s main humanitarian agency.
Colombian exports to the US are subject to a base rate of 10%, but Trump’s words suggest that further increases are imminent.
Colombia is the second largest supplier of coffee to the US, after Brazil. In 2024, it held a 19% share of the US market, compared to Brazil’s 32%.
In the first eight months of this year, however, the gap between the two countries narrowed significantly: Colombian exports, thanks in part to an exceptional harvest, grew by 14.7% to 3.3 million bags, while Brazil’s exports fell by 20.7% to 3.3 million bags.
For the American industry, which had hoped to offset lower purchases from Brazil by buying more from Colombia, the imposition of higher tariffs on Colombian green coffee would be a further setback.
Meanwhile, there has been little improvement in the situation regarding ICE Arabica’s certified stocks.
Yesterday’s report showed a slight increase in stocks, which rose from 467,110 bags on Friday to 468,410 bags. Brazilian stocks remained unchanged at 26,896 bags, which is their lowest level since October 2020.
Finally, Robusta futures remained stable. During yesterday’s session, the contract for January 2026 delivery fluctuated within a narrower range, closing at $4,464 — $14 less than on Friday.
