US tariffs affect coffee shipments and prices

Coffee prices fluctuated last week, reflecting ongoing market uncertainty, as participants continued to digest the announcement of 50% U.S. tariffs on Brazilian products. The U.S. is the world's largest coffee consumer, while Brazil is the largest producer and supplier to both the world and the U.S.

According to a survey conducted by the National Coffee Association (NCA), approximately 66% (or two-thirds) of American adults drank coffee daily in January 2025, averaging three cups of the beverage per day. This level of consumption reflects steady market penetration consistent with the past four years, despite inflation and higher prices.

"However, the Consumer Price Index has already risen in June, with the beginning of the tariff pass-through, and with the levies on Brazilian products, coffee prices would be affected, as US importers will be responsible for paying the additional costs and passing them on to consumers. This outlook also led some traders to rush shipments from Brazil earlier in the week," says Laleska Moda, market intelligence analyst at Hedgepoint Global Markets.

“This movement has also been reflected in the rise in Arabica futures in recent days, as Brazil has greater availability of Arabica at the moment. With most other producers in their off-season, Brazil has taken a leading role in supply, pushing the September contract closer to the 310 c/lb level on Wednesday and Thursday (17), despite this week's pullback due to harvest pressure,” explains the analyst.

Robusta futures rose 8,8% on July 14, but prices lost support later in the week due to increased availability of the variety. Furthermore, on Wednesday (16), Cecafé CEO Marcos Matos stated that the group is not considering a pause in coffee supplies to the US. The Brazilian government and industry are also working on the issue, with coffee being at the center of ongoing negotiations over US tariffs.

Separately, since April, the National Coffee Association (NCA) of the United States has been in negotiations with representatives of the Trump administration. The goal is to include Brazilian coffee on the list of strategic products, which would exempt it from new tariffs. However, no agreement has been reached so far.

Although there are no immediate climate risks and 77% of Brazil's coffee crop has already been harvested, uncertainty remains surrounding US tariffs and trade flows, which will likely maintain market volatility. "The current scenario is also one of slower sales in Brazil. Many farmers have opted out of the market in recent months, following a drop in prices driven by harvest-related supply pressure, leading to below-average marketing data," he says.

In June, Arabica sales were 29%, while Robusta sales were 35%, both below the 38% average for the period. With new concerns emerging around trade policy, sluggish market conditions may continue.

The lower sales also affected Brazilian shipments. Arabica exports in June reached just 1,8 million bags, 26,9% less than in the same period in 2024 and below the five-year average. While the 476,3 bags of robusta shipped in June were above average, exports remained 42,2% lower than the previous year.