Coffee Prices to Fluctuate Amid US-Brazil Trade Dispute

Coffee prices are expected to rise due to the ongoing trade dispute between the US and Brazil. The imposition of high US tariffs on coffee products from Brazil, the world's largest coffee producer, has caused significant market volatility.

Futures contract prices for Arabica coffee have fallen, while Brazil seeks to strengthen its trade relations with China to offset losses from the US market.

US tariffs, which took effect on August 6, 2025, amount to 50% for Brazilian coffees. This decision is interpreted as a political maneuver linked to the prosecution of former Brazilian President Jair Bolsonaro.

China has approved exports from 183 new Brazilian coffee companies, offering some support to prices. However, traders remain cautious as to whether this will offset the loss of the US market.

US importers are required to pay the tariffs, which are expected to lead to higher prices for consumers, including major chains like Starbucks.

The World Bank forecasts an increase in Arabica prices of more than 50% annually in 2025.

Brazil is turning to Europe and Asia to offset losses from the US market. Coffee consumption in China is increasing by approximately 20% per year.

Replacing Brazilian coffee in the US market is a challenge, as drought and climate change have limited global production.

Source: ot.gr