Robusta Coffee Prices Surge Amid Supply Concerns and U.S. Tariff Exemptions
Robusta coffee futures surged on Monday as investor focus shifted back to tightening global supplies, following the United States’ temporary exemption of tariffs on certain imported goods.
The benchmark robusta futures contract on the ICE exchange jumped $190, or 3.8%, to settle at $5,239 per metric ton. The rally comes after a 1.5% loss last week, driven by renewed fears over a global supply squeeze.
Recent trade data revealed a sharp 84% year-on-year drop in Brazil’s robusta coffee exports in March. Certified stocks at ICE warehouses have also fallen to their lowest levels in a month and a half.
“The trade is expecting lower Brazilian production this year due to the extended drought last year, the ‘off-year’ in their biennial production cycle, and disappointing rainfall over the past few months,” said brokerage ADMISI.
Arabica coffee futures also advanced, gaining 1.4% to $3.585 per pound after a 2.7% decline last week. Arabica is primarily used in premium roast and ground blends.
According to consultancy Safras & Mercado, Brazilian growers have sold 95% of their 2024/25 crop, slightly above the five-year average of 90%. However, sales for the upcoming 2025/26 crop remain sluggish, with only 14% sold compared to the historical average of 25% for this time of year. The hesitation is largely attributed to production uncertainty.
The market also reacted to the latest U.S. trade policy developments. President Donald Trump announced tariff exemptions on electronics such as smartphones and computers, most of which are imported from China. While this offered a brief reprieve, Trump warned that additional levies could still be imposed.
Despite lingering concerns about the impact of trade tensions on global economic growth and consumer demand, equity markets in Europe and Asia rose on Monday.
Other Soft Commodities
Cocoa:
London cocoa futures dropped 234 pounds, or 3.8%, to settle at £5,973 per ton, while New York cocoa declined 3.3% to $8,159 per ton. The market has been under pressure from record-high prices and expectations of weakened demand. Traders anticipate a 5–7% decline in Q1 cocoa grind data, a key indicator of chocolate consumption. Brazil’s cocoa grind fell 13% year-on-year, according to the country’s AIPC industry group.
Despite the demand outlook, cocoa supplies remain tight. Farmers in Ivory Coast, the world’s largest cocoa producer, reported potential mid-crop shortages due to ongoing dry weather.
Sugar:
Raw sugar futures fell 0.13 cents, or 0.7%, to settle at 17.87 cents per pound after hitting a 2.5-month low. Conversely, white sugar rose 0.8% to $527.40 per ton.
