Coffee Prices Face New Threats from Tariffs and Drought
Coffee Prices Face New Threats from Tariffs and Drought
Coffee markets are once again in flux. Fernando Maximiliano, Coffee Market Intelligence Manager at StoneX, offers a comprehensive update on global coffee dynamics heading into 2025.
Key Takeaways
Brazil’s arabica production could fall 10% in 2025 due to drought and frost
El Niño and logistics disruptions hit Vietnam’s robusta output in 2024
Proposed US tariffs raise investor uncertainty with no clear industry benefit
Weather Disruptions Still Lead Price Movements
Weather continues to be the dominant force in coffee pricing. As Maximiliano explains, Brazil has faced significant weather issues since 2020, including droughts, La Niña and El Niño phases, and frost events. These conditions disrupted flowering and crop yields. Vietnam, the top robusta producer, also saw output fall due to similar climate impacts, tightening supply and driving price surges through 2024.
Robusta Took the Lead in 2024
Unlike previous years when arabica set the tone, the robusta market drove pricing in the first three quarters of 2024. “We saw a very tight supply and demand balance for robusta” due to El Niño’s effects in Vietnam and lower output in Indonesia. London robusta futures became the global benchmark, displacing New York arabica references temporarily.
Arabica Returns to the Spotlight
By Q4 2024, arabica returned to the centre of pricing discussions. After an optimistic start to the Brazilian growing season, weather turned adverse in August with polar masses, drought, and even fires affecting flowering. “We were the first to publish the estimates... that the arabica crop would be at least 10% lower” in 2025–26.
Tariffs Compound Uncertainty for 2025
Geopolitical risks and proposed US tariffs are further complicating the picture. Maximiliano notes that although initial policy suggested Brazil might benefit, investor risk aversion intensified across commodities, including coffee. The US National Coffee Association also warned that tariffs would hurt domestic roasters since the US produces no coffee.
Make Market Insights Your Competitive Advantage
Access live prices, supply and demand data and actionable market commentary across commodities, equities, currencies and more. Sign up for StoneX Market Intelligence today and receive a free 14-day trial.
---- Written by Frederic Guetin, StoneX TV Producer
---- Expert: Raphael Bulascoschi, StoneX Brazil Market Intelligence Analyst
Coffee
The subsidiaries of StoneX Group Inc. provide financial products and services, including, but not limited to, physical commodities, securities, clearing, global payments, risk management, asset management, foreign exchange, and exchange-traded and over-the-counter derivatives. These financial products and services are offered in accordance with the applicable laws in the jurisdictions in which they are provided and are subject to specific terms, conditions, and restrictions contained in the terms of business applicable to each such offering. Not all products and services are available in all countries. The products and services offered by the StoneX Group of companies involve risk of loss and may not be suitable for all investors. Full Disclaimer. This content is not intended for residents of any particular country, and the information herein is not advice nor a recommendation to trade nor does it constitute an offer or solicitation to buy or sell any financial product or service, by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Please refer to the Regulatory Disclosure section for entity-specific disclosures. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc. The information herein is provided for informational purposes only. This information is provided on an ‘as-is’ basis and may contain statements and opinions of the StoneX Group of companies as well as excerpts and/or information from public sources and third parties and no warranty, whether express or implied, is given as to its completeness or accuracy. Each company within the StoneX Group of companies (on its own behalf and on behalf of its directors, employees and agents) disclaims any and all liability as well as any third-party claim that may arise from the accuracy and/or completeness of the information detailed herein, as well as the use of or reliance on this information by the recipient, any member of its group or any third party.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve; our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
