Global Coffee Prices Experience Shop Drop After 40% Tariffs On Brazilian Coffee Eliminated – CoffeeTalk

Global coffee prices fell significantly on Friday following U.S. President Donald Trump’s decision to eliminate 40% tariffs on many agricultural imports from Brazil, notably green coffee beans. This tariff reduction is expected to increase the flow of Brazilian coffee into the United States, which relies on Brazil for about a third of its coffee supply. In the past year, retail coffee prices in the U.S. surged by 40%, partly due to these tariffs, contributing to a drop in Trump’s approval ratings, as revealed by a recent Reuters/Ipsos poll.

On the International Coffee Exchange (ICE), arabica coffee futures dropped nearly 2% to close at $3.6945 per pound, having previously experienced a decline of over 6%, reaching two-month lows. Meanwhile, robusta coffee, primarily used for instant coffee, decreased by 2.7% to $4,506 per metric ton after an initial plunge of 8%. Despite these price reductions, some traders remain cautiously optimistic. A trader from a major coffee trading house remarked that the market’s adjustment to the tariff news may lead to further declines, but he does not anticipate prices falling below $3 per pound. He acknowledged the ongoing challenges posed by a global arabica crop deficit, low stocks, and supply risks associated with the La Nina weather pattern.

In the wake of the tariff announcement, logistical adjustments are already being made; for example, shipments initially intended for Germany are being redirected to the U.S. to capitalize on the expected increase in Brazilian coffee imports. Additionally, traders are keeping an eye on the repercussions of recent flooding and landslides affecting coffee production in Vietnam, another leading coffee producer.

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