Coffee becomes cheaper after the US decision: Trump cancels tariffs, market reacts with sharp price drop
21 November 19:51
World coffee prices have fallen sharply after US President Donald Trump canceled 40 percent tariffs on imports of Brazilian agricultural products, including coffee and cocoa. This was reported by Reuters, according to "Komersant Ukrainian".
A sharp drop on the stock exchanges
Futures for Arabica coffee on the ICE exchange fell by 4.6%, dropping to $3.5925 per pound after a temporary drop of more than 6% to a two-month low.
The decline also affected another segment of the market: futures for robusta, which is commonly used in the production of instant coffee, fell by 5% to $4,400 per tonne after falling by 8% earlier in the trading session.
Prices reacted to expectations of increased supply in the US market after the lifting of trade restrictions on Brazil.
Political implications within the US
According to Reuters/Ipsos, the tariffs imposed in the summer were one of the factors behind the sharp rise in retail coffee prices in the US – in September they were 40% higher than before the tariffs were imposed. The rise in food prices has been widely discussed in the context of Trump’s falling approval rating, which has dropped to its lowest level since he returned to power.
The abolition of tariffs on Brazilian products followed similar decisions on November 14 regarding countries producing coffee and other agricultural products.
Impact on the global market
Brazil remains a key player in the global coffee market, with about a third of its total coffee production going to the United States, the world’s largest coffee consumer.
