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Trade4go
Apr 18th, 2025
Original content
Colombia’s coffee sector set a record with 14.9 million 60-kilogram (kg) sacks produced by Mar-25, marking a 31% year-on-year (YoY) increase, the highest in two decades, according to the National Federation of Coffee Growers (Fedecafé). In Q1-2025 alone, production rose 36% YoY to 3.7 million sacks. Exports also surged 21% in the same period, with 3.6 million sacks shipped globally — the best first quarter in five years. Fedecafé attributes the success to the “Solidarity Action Plan” despite capital pressures. However, upcoming harvests may be impacted by heavy rains. Domestic consumption remains weak, with only 180,000 sacks of 100% Colombian coffee sold locally despite a 5% rise.
In Mar-25, Peru exported 3,585 tons of coffee worth USD 20.33 million — a 54% YoY drop in volume but a 1% increase in value, thanks to a 119% surge in average price to USD 5.67/kg. Global supply disruptions, caused by droughts in Brazil and floods in Vietnam, drove up prices amid rising demand. The United States (US) was the top buyer (23% share), followed by Colombia (20%), Canada (13%), Germany (10%), and Chile (6%).
Coffee prices are heavily impacted by uncertainties surrounding the US government's tariffs on global coffee trade, leading to increased risks for producers and small traders, according to the Center for Advanced Studies in Applied Economics (Cepea). These tariffs, combined with tight margins, low predictability, and limited financial protection tools, contribute to heightened market volatility. Additionally, the upcoming Brazilian Robusta coffee harvest adds pressure, with the Cepea/Esalq indicator for Robusta falling by 7.7% in the first week of April. However, US tariffs may offer a competitive advantage for Brazilian coffee, as its export tariff to the US is set at 10%, compared to significantly higher tariffs of 46% for Vietnam and 32% for Indonesia.
On April 14, US Representatives launched the Congressional Coffee Caucus, a bipartisan initiative aimed at supporting the coffee industry. The caucus debuted amid growing concern over the potential economic impact of proposed US tariffs on green coffee imports, which could raise prices across the supply chain. With Hawaii and Puerto Rico being the only domestic commercial coffee-growing regions, the US remains heavily dependent on imports from major producing countries, many of which are now subject to tariff threats under a new reciprocal trade proposal. The caucus aims to strengthen the global coffee supply chain, highlight coffee’s economic significance in every US district, and promote its health benefits. The National Coffee Association welcomed the initiative, emphasizing coffee’s central role in American daily life and commerce.
The US, which produces less than 1% of the world’s coffee, relies heavily on imports from countries in the ‘coffee belt.’ New tariffs—ranging from 10% to 46%—now target 15 of the top 20 coffee-producing nations, including Brazil, Vietnam, Colombia, and Indonesia. Part of a broader trade policy under the Trump administration, these measures threaten to raise prices and disrupt the entire US coffee supply chain. The tariffs may not only impact trade and pricing but also damage the US coffee industry's global reputation.
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Brazil's coffee prices in W15 stood at USD 9.71/kg, reflecting a slight 0.10% week-on-week (WoW) drop and 1.42% month-on-month (MoM) decrease, following a peak of USD 10.17/kg in W11. Despite these short-term declines, prices remain significantly higher YoY, up 53.15% from W15 2024, due to long-term supply concerns stemming from adverse weather conditions, including droughts and frosts since 2021, and a forecasted 4.4% drop in the 2025 harvest. While global demand and market adjustments play a role, the US-imposed 10% tariff on Brazilian coffee introduces uncertainty, though it could potentially offer Brazil a competitive edge over rivals like Vietnam, depending on US market demand.
Colombia's coffee prices in W15 reached USD 9.73/kg, marking a 3.76% WoW and 2.99% MoM decline from the previous weeks, after peaking at USD 10.23/kg in W13. Despite these short-term decreases, prices are still up 15.97% YoY compared to W15 2024. The price fluctuations can be attributed to broader trade tensions, global economic uncertainties, and competition from other coffee exporters. While Colombia’s coffee remains in strong demand, particularly in the US market, the impact of the US-imposed tariffs and potential supply chain disruptions could weigh on price stability moving forward.
Vietnam's coffee prices in W15 stood at USD 4.67/kg, reflecting a significant 10.02% WoW and 10.88% MoM drop after peaking at USD 5.24 in W12, which marked the highest price for the year. This decline is a natural market adjustment, as prices returned to more typical levels following the earlier peak. The drop can also be attributed to the previous increase caused by reduced Robusta production in Vietnam, due to dry weather that resulted in the lowest output in 25 years. While export demand remains strong, particularly from Europe and the US, the 46% US tariff on Vietnamese coffee is a key challenge, likely reducing competitiveness and demand in the US market. Despite these risks, Vietnam's solid presence in other regions like Europe and Asia, along with tightening global coffee supply, provides a cushion, supporting the possibility of higher prices in the short term. However, the ongoing global supply adjustments will continue to play a crucial role in future pricing trends.
Coffee exporters should target growing markets in Europe and Asia, particularly for countries like Vietnam and Colombia, to mitigate risks from US tariffs and shifting demand. This strategy can help offset potential losses from tariff impacts and volatile US market conditions.
To manage price fluctuations, businesses should use forward contracts to lock in prices and reduce exposure to market volatility. Additionally, focusing on premium and organic coffee products can help maintain higher price points and secure stable revenue streams amid market corrections.
Sources: Tridge, Agraria PE, Canal Rural, Daily Coffee News, El Colombiano, Nong Nghiep Moi Truong, Viet Stock, VOH,
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