Tag: US tariffs

Coffee Prices Plunge as Trump Removes Tariffs on Brazilian Products

Posted on by Qahwa World

Dubai – Qahwa World

On Friday, coffee prices fell sharply, with March arabica futures (KCH26) down 1.91% and January robusta futures (RMF26) falling 2.70%. Arabica reached a seven-week low.

The decline followed an executive order signed by President Trump late Thursday, exempting Brazilian food products from tariffs, including the 40% duty on Brazilian coffee. Prices dropped further after the Brazilian real weakened to a five-week low against the dollar, boosting the competitiveness of Brazilian coffee exports.

Weather factors also influenced the market. Heavy rains are forecast across Brazil’s main coffee-growing regions into next week, which benefits crop development but puts downward pressure on prices.

Robusta prices found some support from Vietnam, where heavy rainfall delayed harvesting in Dak Lak, the country’s largest coffee-producing province. Additional showers may damage crops further, providing some upward pressure on prices.

Inventory trends on ICE exchanges were mixed. US tariffs had previously limited Brazilian coffee imports, reducing stocks. As of Thursday, ICE-monitored arabica stocks dropped to a 1.75-year low of 398,645 bags, while robusta inventories fell to a four-month low of 5,567 lots. US buyers have been avoiding new Brazilian coffee contracts due to tariffs, tightening domestic supply, as roughly one-third of unroasted coffee in the US comes from Brazil. From August to October 2025, US imports of Brazilian coffee fell 52% year-on-year to 983,970 bags.

Rainfall data also influenced the market. Brazil’s largest arabica region, Minas Gerais, recorded 19.8 mm of rain in the week ending November 14 — 42% of the historical average, according to Somar Meteorologia.

On the supply side, analysts at StoneX forecast Brazil’s 2026/27 coffee crop at 70.7 million bags, including 47.2 million bags of arabica — a 29% increase year-on-year.

Vietnam’s coffee production is also rising. January–October 2025 exports increased 13.4% year-on-year to 1.31 million metric tons. Production for the 2025/26 crop year is projected at 1.76 million metric tons (29.4 million bags), a four-year high. The Vietnam Coffee and Cocoa Association (Vicofa) expects production to be 10% higher than last year if weather conditions remain favorable. Vietnam remains the world’s largest robusta producer.

Global supply data show mixed signals. The International Coffee Organization reported on November 7 that world coffee exports for the current marketing year (October–September) fell 0.3% year-on-year to 138.658 million bags.

Brazil’s Conab forecasted a smaller 2025 arabica crop, reducing it by 4.9% to 35.2 million bags, while total coffee production was adjusted down 0.9% to 55.2 million bags.

The USDA projects global coffee production in 2025/26 at a record 178.68 million bags, with arabica down 1.7% to 97.022 million bags and robusta up 7.9% to 81.658 million bags. Brazil’s crop is expected to rise 0.5% to 65 million bags, and Vietnam’s output is forecast up 6.9% to 31 million bags, a four-year high. Ending stocks for 2025/26 are projected at 22.819 million bags, up 4.9% from the previous year.

Coffee Prices Slide as U.S. Hints at Possible Tariff Reductions

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Dubai – Qahwa World

Coffee markets recorded a sharp downturn on November 12 after fresh signals from Washington suggested that import tariffs on coffee could soon be eased, triggering immediate reactions across arabica and robusta futures. December arabica contracts declined by 3.62%, while January robusta fell by 5.09%, reaching a two-week low. The drop intensified after comments by President Donald Trump indicating plans to reduce tariffs on coffee, followed by remarks from Treasury Secretary Bessent about upcoming announcements affecting products not grown in the United States, coffee among them.

The market also reacted to the first outlook from StoneX for the 2026/27 season, which projects Brazil’s total coffee harvest at 70.7 million bags, including 47.2 million bags of arabica — a significant 29% increase compared to the previous year. Consistent rains in Brazil added further pressure, with Somar Meteorologia reporting that Minas Gerais, the country’s primary arabica-producing region, received 72.1 mm of rain during the week ending November 7, equal to 160% of its historical average. Improved moisture levels reduced earlier concerns about dryness and contributed to the bearish sentiment.

Additional downward pressure came from Vietnam, where the National Statistics Office confirmed that coffee exports for January to October 2025 rose by 13.4% year-on-year to 1.31 million metric tons. Production for 2025/26 is expected to increase by 6% to 1.76 million metric tons, marking the country’s highest output in four years. Industry officials noted that, with favorable weather, the harvest could potentially surpass last year’s by 10%. Vietnam remains the world’s largest producer of robusta coffee, and higher supply expectations have weighed heavily on prices.

Despite these developments, some indicators are providing support to the market. The International Coffee Organization reported a slight decline of 0.3% in global coffee exports for the current marketing year, reaching 138.658 million bags. At the same time, ICE inventories have tightened noticeably as U.S. buyers reduce purchases from Brazil since the introduction of 50% tariffs on Brazilian coffee imports. ICE-monitored arabica inventories fell to a 1.75-year low of 406,129 bags, while robusta stocks dropped to 5,873 lots, the lowest level in nearly four months. With about one-third of U.S. unroasted coffee typically sourced from Brazil, reduced contracting has led to a visible drawdown in domestic supplies.

Longer-term climate risks also continue to influence sentiment. In mid-September, the U.S. National Oceanic and Atmospheric Administration raised the probability of a La Niña event to 71% for the October–December period. Such conditions can bring excessively dry weather to Brazil and potentially disrupt the 2026/27 crop. Brazil’s crop agency Conab has already revised its 2025 arabica forecast downward by 4.9%, estimating 35.2 million bags, while also trimming overall coffee production to 55.2 million bags.

On a global scale, the USDA Foreign Agricultural Service expects 2025/26 world coffee production to reach a record 178.68 million bags, reflecting a 2.5% increase. The outlook includes a slight decline of 1.7% in arabica production to 97.022 million bags, offset by a robust 7.9% rise in robusta output to 81.658 million bags. Brazil’s production is forecast to grow modestly by 0.5% to 65 million bags, while Vietnam’s output is projected to rise by 6.9% to 31 million bags, the highest level in four years. Global ending stocks are estimated to climb by 4.9% to 22.819 million bags.

Global Coffee Prices Surge as Brazil Faces Weather Woes and US Tariffs

Posted on by Qahwa World

São Paulo, August 25, 2025 (Qahwa World) – Coffee markets remain under heavy pressure from climate shocks in Brazil and trade tensions with the United States, pushing prices sharply higher in recent weeks, even as a stronger U.S. dollar triggered modest profit-taking on Monday.

Arabica futures in New York had surged to a 3.5-month high earlier in the day but ended lower, with December contracts closing down 0.15% after investors booked profits. September robusta contracts were idle due to a UK holiday. Analysts said the dollar’s strength spurred liquidation, though underlying supply concerns continue to dominate the market.

In Brazil, retail coffee prices that had fallen an average of 12% earlier in August are now expected to reverse course. According to the Brazilian Coffee Industry Association (ABIC), raw coffee prices rose almost 25% between July and August, reaching 2,191 reais ($395) per 60-kilogram bag. Despite this surge, supermarket prices in August averaged 58.99 reais (around $10) per kilogram, still below May’s peak of 70 reais/kg. ABIC’s executive director, Celirio Inacio, warned that if futures remain elevated, higher shelf prices are “inevitable.”

The main external factor driving the rally remains the 50% tariff imposed by the U.S. government on Brazilian goods, including coffee. Brazil normally supplies about one-third of U.S. unroasted coffee imports, and American buyers have already begun canceling contracts. Marcio Ferreira, president of Brazil’s Coffee Exporters Council (Cecafé), called the tariffs “the main driver” of the sharp price increases in New York.

Weather concerns add another layer of pressure. Somar Meteorologia reported that Minas Gerais, Brazil’s largest arabica-producing state, received no rainfall in the week ending August 23. Frost damage earlier in the month has also raised fears of reduced yields. Despite this, Brazil’s 2025/26 harvest is almost complete: Safras & Mercado estimated 99% of the crop had been gathered by August 20, with robusta fully harvested and arabica at 98%. Cooxupé, the country’s largest cooperative, reported its members’ harvest at 86.1% by mid-August.

Exports are slowing dramatically. Brazil’s July shipments of unroasted coffee dropped 20.4% year-on-year to 161,000 metric tons, while Cecafé data showed green coffee exports fell 28% to 2.4 million bags. Arabica exports fell 21%, robusta plunged 49%, and total shipments from January through July were down 21% from last year at 22.2 million bags. Meanwhile, inventories tracked by ICE remain at multi-year lows: arabica stocks hit a 15-month low of 726,661 bags in mid-August, while robusta fell to its lowest in four weeks.

Global dynamics reflect the same strain. The USDA’s Foreign Agriculture Service (FAS) projects world coffee production in 2025/26 will rise 2.5% year-on-year to a record 178.7 million bags, with robusta up nearly 8% but arabica slightly down. Brazil’s production is forecast to rise only 0.5% to 65 million bags, while Vietnam could rebound 6.9% to 31 million bags, its largest in four years. Yet despite the higher output, trading house Volcafe predicts an arabica deficit of 8.5 million bags for 2025/26 — the fifth consecutive year of shortfalls.

Brazil, as the world’s top coffee producer and exporter and the second-largest consumer after the United States, stands at the center of these global shifts. With tariffs restricting trade, exports slowing, inventories tightening, and weather threats mounting, analysts warn that consumers should brace for rising retail coffee prices both domestically and worldwide — even if day-to-day trading sometimes pulls prices lower.