ICE Arabica Coffee Futures Hit Five-Month Low

Traders closing out positions ahead of the New Year and broader market weakness sent ICE Arabica coffee futures tumbling to a five-month low on Friday, December 26. The sell-off came as part of a wider decline in soft commodities, with both sugar and cocoa also falling. This sharp move highlights the sensitivity of coffee futures to macro positioning and seasonal flows—even amid ongoing supply concerns.

The March contract for Arabica coffee closed at $1.686 per pound, down 1.55 cents (0.9%) after hitting an intraday low of $1.6775—the lowest level since late July. That marks the fourth straight day of losses and the biggest weekly drop—3.5%—since early December.

Why Did ICE Arabica Coffee Futures Drop So Sharply?

The steep decline followed the breakdown of a key psychological support level around $1.70 per pound. Once that level gave way, selling intensified. The slide also came as traders squared books ahead of the year-end holidays, leading to thin trading conditions and amplified moves. Volume was light across U.S. soft commodity markets, which reopened on Friday after the Christmas holiday, while European markets remained closed until Monday.

How This Week Unfolded in Coffee Futures

This week alone, March Arabica futures lost 3.5%, the largest weekly decline since early December. The contract had previously spiked to a two-and-a-half-year high in early October, driven by fears over drought damage to crops in top-producing Brazil. But since then, the market has reversed sharply. In fact, Arabica coffee futures are now on track to finish the year with a decline of more than 50% from those highs.

What About Other Soft Commodities?

The weakness wasn’t limited to coffee. March raw sugar futures also fell, closing down 0.06 cent (0.4%) at 14.70 cents per pound—marking a fifth consecutive daily loss and a 2% drop for the week. That puts the benchmark sugar contract on course for its fourth straight annual decline.

Meanwhile, March New York cocoa futures touched a one-week low of $2,935 per tonne before settling at $2,941, down $23 (0.8%). For the week, cocoa fell 1.3%—its biggest weekly drop since mid-November—but remains on track to post a third consecutive annual gain.

What Does This Mean for Coffee Prices Going Forward?

With Arabica futures having given up more than half their value since early October’s peak, traders are clearly shifting focus away from supply scares toward broader market dynamics—including year-end positioning, macroeconomic sentiment, and technical levels like the $1.70 support. Thin holiday trading can exaggerate price swings, but the underlying weakness suggests that bullish crop concerns have significantly cooled for now.

Frequently Asked Questions

What were the exact prices for ICE Arabica coffee futures on December 26?

The March contract settled at $1.686 per pound, after hitting an intraday low of $1.6775. It closed down 1.55 cents (0.9%) for the day.

How much did Arabica coffee futures drop this week?

March Arabica coffee futures fell 3.5% for the week ending December 26, the largest weekly decline since early December.

What was the lowest level for March Arabica coffee futures in 2023?

The March contract dropped to $1.6775 per pound on December 26—the lowest since late July 2023.

Did other soft commodities also decline on December 26?

Yes. March raw sugar futures fell to 14.70 cents per pound, down 0.4% for the day and 2% for the week. March cocoa futures settled at $2,941 per tonne, down 0.8% for the day and 1.3% for the week.

Are coffee futures expected to end 2023 higher or lower than their October peak?

Arabica coffee futures are on track to end 2023 more than 50% below their two-and-a-half-year high reached in early October.

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