Even With Tariff Cuts, Coffee Prices Aren't Expected To Come Down – CoffeeTalk

Coffee prices are expected to remain high, despite hopes for relief from tariff reductions, as stated by Illycaffe SpA. The CEO, Cristina Scocchia, announced plans for another price increase in January, following two earlier hikes this year. Arabica coffee bean prices hit record levels last month due to US tariffs on Brazilian exports and poor global harvests. Although prices have slightly decreased since US President Trump expanded tariff exemptions, they stay well above historical averages. Scocchia emphasized that there’s a limit to how much cost increases in unroasted coffee can be absorbed, indicating that further price adjustments will occur across all markets.

According to Carlos Mera from Rabobank, consumer prices often lag behind commodity costs, predicting a potential rise in coffee prices on store shelves in the coming months as consumer costs recoup past increases. Illycaffe anticipates the prices of unroasted beans to stabilize between $2.80 and $3.00 per pound by mid-2026, above the five-year average. Scocchia expressed disappointment over the market’s lack of a significant price drop and attributed the ongoing high costs of unroasted beans to market speculation rather than supply constraints.

Despite these challenges, Illycaffe’s sourcing strategy remains centered on Brazil, essential for their unique blends, while the company plans to explore production partnerships in the US, which comprises 20% of its business revenue. They have endeavored to mitigate the impact of rising costs on consumers by absorbing some of the increases within their margins, resulting in sustained sales volume. The demand for coffee continues to be strong, leading Illycaffe to expect a modest market growth in the near future.

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