Coffee Prices Slide as U.S. Hints at Possible Tariff Reductions
Dubai – Qahwa World
Coffee markets recorded a sharp downturn on November 12 after fresh signals from Washington suggested that import tariffs on coffee could soon be eased, triggering immediate reactions across arabica and robusta futures. December arabica contracts declined by 3.62%, while January robusta fell by 5.09%, reaching a two-week low. The drop intensified after comments by President Donald Trump indicating plans to reduce tariffs on coffee, followed by remarks from Treasury Secretary Bessent about upcoming announcements affecting products not grown in the United States, coffee among them.
The market also reacted to the first outlook from StoneX for the 2026/27 season, which projects Brazil’s total coffee harvest at 70.7 million bags, including 47.2 million bags of arabica — a significant 29% increase compared to the previous year. Consistent rains in Brazil added further pressure, with Somar Meteorologia reporting that Minas Gerais, the country’s primary arabica-producing region, received 72.1 mm of rain during the week ending November 7, equal to 160% of its historical average. Improved moisture levels reduced earlier concerns about dryness and contributed to the bearish sentiment.
Additional downward pressure came from Vietnam, where the National Statistics Office confirmed that coffee exports for January to October 2025 rose by 13.4% year-on-year to 1.31 million metric tons. Production for 2025/26 is expected to increase by 6% to 1.76 million metric tons, marking the country’s highest output in four years. Industry officials noted that, with favorable weather, the harvest could potentially surpass last year’s by 10%. Vietnam remains the world’s largest producer of robusta coffee, and higher supply expectations have weighed heavily on prices.
Despite these developments, some indicators are providing support to the market. The International Coffee Organization reported a slight decline of 0.3% in global coffee exports for the current marketing year, reaching 138.658 million bags. At the same time, ICE inventories have tightened noticeably as U.S. buyers reduce purchases from Brazil since the introduction of 50% tariffs on Brazilian coffee imports. ICE-monitored arabica inventories fell to a 1.75-year low of 406,129 bags, while robusta stocks dropped to 5,873 lots, the lowest level in nearly four months. With about one-third of U.S. unroasted coffee typically sourced from Brazil, reduced contracting has led to a visible drawdown in domestic supplies.
Longer-term climate risks also continue to influence sentiment. In mid-September, the U.S. National Oceanic and Atmospheric Administration raised the probability of a La Niña event to 71% for the October–December period. Such conditions can bring excessively dry weather to Brazil and potentially disrupt the 2026/27 crop. Brazil’s crop agency Conab has already revised its 2025 arabica forecast downward by 4.9%, estimating 35.2 million bags, while also trimming overall coffee production to 55.2 million bags.
On a global scale, the USDA Foreign Agricultural Service expects 2025/26 world coffee production to reach a record 178.68 million bags, reflecting a 2.5% increase. The outlook includes a slight decline of 1.7% in arabica production to 97.022 million bags, offset by a robust 7.9% rise in robusta output to 81.658 million bags. Brazil’s production is forecast to grow modestly by 0.5% to 65 million bags, while Vietnam’s output is projected to rise by 6.9% to 31 million bags, the highest level in four years. Global ending stocks are estimated to climb by 4.9% to 22.819 million bags.
