Warning Issued Over Coffee Prices

Adverse weather conditions in one of America’s leading coffee-producing countries could soon weigh on prices in the U.S.

According to a Wednesday report from Barchart, a provider of market data for the financial and commodity industries, fears over frost impacting Brazilian harvests have put upward pressure on coffee prices this week.

Why It Matters

The vast majority of America’s coffee imports come from Latin America, principally from Brazil, which exported $2.6 billion worth of the commodity to the U.S. between June 2024 and May of last year. Brazil is also the fastest-growing country of origin, with an additional $600 million imported in 2024 compared to 2023. As a result, even minor changes to its production rate can impact specialty and retail coffee prices in the U.S., which is almost entirely reliant on imports.

What To Know

According to forecasts from the weather channel Climatempo, cited by Communicaffe, a cold front is moving through coffee-growing regions of Brazil this week, potentially impacting crops. Similar frost concerns have continued to weigh on the Brazilian coffee market and global prices this year.

According to data from Intercontinental Exchange, Coffee C futures, which represent the global benchmark for Arabica coffee prices, rose modestly on Tuesday amid these fears. Prices have trended downward since hitting near-record highs earlier this year due to weather-related difficulties in Brazil and rising global demand.

The primary risk now facing the coffee industry, and which will potentially contribute to higher prices in America, is escalating trade barriers with the U.S. These came to a head when President Donald Trump announced earlier this month that he planned to impose a blanket, 50-percent tariff on Brazil’s imports. In a letter to the country, posted on the Truth Social platform, Trump cited the “very unfair trade relationship” between the pair, as well as what he called a “witch hunt” against former President Jair Bolsonaro, currently on trial for attempting to overturn his 2022 election loss.

What People Are Saying

Guilherme Morya, commodities analyst with the financial services company Rabobank, wrote in a recent analysis: “Before the US announced a 50% tariff on Brazilian coffee imports, prices were trending downward.

“Since the tariff announcement, market volatility has increased, likely due to buyers seeking alternative origins,” he added. “So far, no cancellations of existing contracts have been reported, but new purchases have stalled. Both exporters and importers are awaiting clarity. It is still too early to assess the long-term effects, as it will be crucial to observe whether the tariff is fully implemented and how long it remains in effect. This measure could reshape international coffee trade flows, with implications for producers, exporters, and consumers.”