Why Weather and Tariffs Are Driving Coffee Price Volatility

Why Weather and Tariffs Are Driving Coffee Price Volatility

Global coffee markets are confronting a double challenge in 2025. Erratic weather patterns and new trade tariffs are reshaping supply, trade routes, and pricing dynamics across key producing countries. With La Niña conditions disrupting rainfall in Brazil and U.S. policy shifts unsettling exporters, the industry faces one of its most complex balancing acts in recent memory.

Fernando Maximiliano, Market Intelligence Manager at StoneX Brazil, examines how weather instability and tariffs are influencing both production and global coffee flows, creating uneven pressures between arabica and robusta segments.

Key Themes from the Discussion

• La Niña-driven rainfall deficits are threatening Brazil’s arabica crop during a critical flowering phase.
• New U.S. tariffs on Brazil and Colombia are distorting trade routes and inflating domestic coffee prices.
• Volatility is deepening as supply risks and trade policies converge, reshaping futures markets and producer margins.

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Weather Risks Threaten Brazil’s Supply

Fernando highlights how irregular rainfall and La Niña are adding strain to Brazil’s 2025–26 crop outlook. “We saw some irregular rainfall... the rainfall was below average”, he explains, noting that such deficits threaten flowering and early development stages for arabica beans. The market is watching this closely as “flash droughts” remain a distinct risk, keeping production forecasts highly uncertain heading into November’s crop survey.

Tariffs Reshape Trade and Price Dynamics

At the same time, trade policies are amplifying volatility. Fernando points out that “The U.S. puts 50% of us on Brazil... that is bullish”, with tariffs distorting flows and inflating domestic costs. Exports from Brazil fell 45% in August, while shipments to Colombia surged over 500%, reflecting a market forced to reroute around policy barriers. As weather volatility meets trade friction, the global coffee market finds itself navigating a new phase of structural unpredictability.

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---- Written by Frederic Guetin, StoneX TV Producer

---- Expert: Fernando Maximiliano, StoneX Brazil Market Intelligence Manager

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