Brazil's Coffee Prices Take a Dip: The Impact of Tariffs and Supply

Brazil experienced its first drop in consumer coffee prices in 18 months, with a 1.01% decrease in July. The drop follows a decline in farmer prices after the 2025 crop harvest and amid volatility in international markets. Tariffs imposed by the U.S. on Brazilian goods fuel uncertainty.

In a significant development for the coffee market, Brazil's consumer prices for the beverage fell by 1.01% in July, marking the first decline in 18 months. This change comes after months where coffee significantly contributed to Brazil's inflation, according to the Brazilian Institute of Geography and Statistics (IBGE).

The decrease in retail prices can be attributed to lower farmer prices following the completion of the 2025 crop harvest and fluctuating international markets, exacerbated by U.S. President Donald Trump's decision to impose a 50% tariff on Brazilian goods. These tariffs have spared some commodities, like orange juice, but not coffee, eggs, and beef.

Despite recent concerns that the tariff hike might disrupt trade between the U.S., the largest coffee consumer, and Brazil, the largest producer, experts like IBGE manager Fernando Goncalves suggest it's too soon to determine if these tariffs will lead to lower staple prices like coffee. He emphasizes that the tariff's impact hasn't fully materialized yet.

(With inputs from agencies.)