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MILAN – The renewed risk of frost in Brazil’s coffee belt sends coffee markets soaring again. In yesterday’s trading day, Tuesday, July 22, Ice Arabica’s main contract for September delivery gained 1.5%, climbing to 296.35 cents. September ICE Robusta coffee rose by 3.2% to settle at $3,289, rebounding sharply from Monday’s lows.
Coffee markets were boosted by a new forecast from Climatempo announcing the arrival of a cold front which is expected to affect the coffee belt in the second half of the week, with potential risks to crops.
Analysts agree that White House trade policies are helping to exacerbate market volatility.
According to Rabobank, before the US announced a 50% tariff on Brazilian coffee imports, prices were trending downward. From January to July, Arabica and Conilon prices in Brazil fell 25% and 47%, respectively – driven by Brazil’s current harvest and optimistic global supply outlooks, especially in Brazil and Vietnam.
“Since the tariff announcement, market volatility has increased, likely due to buyers seeking alternative origins,” reads the same report.
“So far, no cancellations of existing contracts have been reported, but new purchases have stalled. Both exporters and importers are awaiting clarity. It is still too early to assess the long-term effects, as it will be crucial to observe whether the tariff is fully implemented and how long it remains in effect.
This measure could reshape international coffee trade flows, with implications for producers, exporters, and consumers.”
Brazil’s harvest is progressing well. However, “yield issues are emerging – more coffee cherries are needed to produce a bag of processed coffee (lower “outturn”), likely due to low rainfall in February, as previously forecast during our Crop Tour,” concludes the report.
In other news, Cooxupé, Brazil’s biggest coffee cooperative, reports that its members had harvested 59% of this year’s estimated crop by 18 July. The harvest is furthest ahead (70 per cent) in Matas de Minas, while it is proceeding more slowly in Sul de Minas (63.3 per cent), São Paulo (62.4 per cent) and Cerrado Mineiro (49.6 per cent).
