Coffee prices hit 10-day high

NEW YORK, July 12 (Reuters): Arabica coffee prices hit a 10-day high on Friday as investors focussed on Brazil's threat to retaliate should the Trump administration proceed to impose 50% tariff on Brazilian imports, but receded late in the trading session to end lower.

Brazil is the world's largest grower and exporter of coffee, while the US is its biggest client and the world's largest drinker of the beverage. Out of all the coffee the country consumes, no less than 33% of it comes from Brazil.

Coffee trade sources said the new duty, if confirmed on August 1, could all but halt Brazilian coffee shipments to the United States, and the country will not be able to source from elsewhere at similar volumes or prices.

Coffee futures on the ICE exchange tend to rise when stocks fall, as that signals supply tightness.

ICE New York arabica coffee futures hit a 10-day high of$2.9760 per lb, extending Thursday's 1.3% gain, but later settled down 1.3 cent, or 0.5%, at $2.865 per lb.

The quick pace of harvest in Brazil was cited by dealers as one factor behind the reversal in price.

London-based robusta coffee futures continued weak, falling 3.1% to $3,216 a ton.