August 11

8/11 – On Aug 6, the U.S. slapped 50% tariffs on Brazilian goods, including coffee. As a result, coffee futures, which hit all-time record highs of $4.32/lb this past Feb, then slumped to $2.80 in early July, are now back over $3 per pound ($3.09 on 8/8). Brazil accounts for roughly one-third of all U.S. coffee imports, and the enormous tariff increase will completely scramble supply chains. There’s just not enough alternate arabica supply available from other Central and South American countries to offset such a huge loss. However, forward futures contracts for the balance of 2025 and all of 2026 are all trading sub-$3 - indicating that, despite Trump’s current firm stance, traders expect tariffs to be temporary. It would be hugely unpopular politically if big increases in coffee prices started rippling across the country. The problem is that coffee prices are likely headed higher while we wait out the “temporary” weeks or months.