Trump's Tariff Statement Reduced Coffee Prices

Decline in Coffee Prices: Trump's Tariff Signal

Arabica coffee prices have fallen to their lowest level in the last five weeks on the New York Stock Exchange. This decline was influenced by signals from the administration of U.S. President Donald Trump that tariffs on coffee beans may be reduced soon.

Sharp Drop in Futures

On Thursday, futures fell by 1.5%, after closing on Wednesday with a 5.7% decline. This was recorded as the sharpest daily drop seen since mid-September.

Comments from Trump and Bessent

Trump responded to a question about coffee prices during a statement made Tuesday night, saying, “We will lower some tariffs.” U.S. Treasury Secretary Scott Bessent also expressed hopeful statements regarding price adjustments.

Trade with Brazil and Its Effects

It was noted that tariffs applied to Brazil, the world's largest coffee producer, have nearly halted trade between U.S. buyers and Latin American sellers by slowing down the flow of beans. This situation, combined with adverse weather conditions, led to record levels for Arabica futures last month.

Future of the Market is Being Published

Kona Haque, Research Director at ED&F Man, stated in an assessment with Bloomberg, “There may be some relief from here.” However, according to Haque, the willingness of U.S. roasters to purchase from Brazil after the tariffs are lifted and the supply amount from South America will significantly impact the market.

Price Trends for 2024

Arabica coffee prices have increased by approximately 17% this year. For 2024, prices are expected to decline under the influence of abundant harvests in 2026. However, Rabobank emphasized that agricultural commodities are becoming increasingly fragile against geopolitical risks.