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MILAN – Brazil’s weather and Trump’s tariffs were the two main drivers influencing coffee futures – particularly Arabica – this past week. After the long weekend of 4 July, trading resumed in New York on Monday 7 July, with heavy losses (-4%) causing the main contract for September delivery to plummet to 278.25 cents — its lowest level since 13 November last year.
However, the contract recovered some of the previous day’s losses on Tuesday, rising 2.6% to reach 285.60 cents.
Technical factors, as well as forecasts of low rainfall in Brazil, contributed to short covering. On Wednesday 9 July, the contract fell to 284.05 cents, but prices rose again on Thursday 10, driven upwards by the announcement of new US duties of 50% on Brazilian imports.
The contract closed at 287.80 cents, marking a daily gain of 1.3%.
The upward trajectory continued on Friday 11 July, reaching an intraday high of 297.60 cents.
However, the trend then reversed, with the benchmark eventually falling back to 286.50 cents — 130 points below the previous day. Similar to New York, London (September) began the week with sharp declines, falling 4.1% to settle at $3,526, just above the lows of the last week of June.
In line with the Arabica market, the Ice Robusta also moved upwards on Tuesday, albeit less sharply (-1.2%). Then, a decidedly bearish trend took over since mid-week, bringing Friday’s close to $3,216 — the lowest level for the main contract since 5 March 2024.
The Trump administration’s decision to impose 50% tariffs on Brazilian imports has sent shockwaves through the coffee markets, threatening to cause serious supply issues for the U.S. industry and lead to a significant increase in retail prices.
There is hope that coffee will be one of categories of goods exempted from duties. The National Coffee Association has been lobbying strongly for this over the last few months.
Favoured by good weather, harvesting operations in Brazil reached 69% of the estimated crop volume, a 9% increase over the previous week, Safras & Mercado reported on Friday.
The Brazilian consultancy added that this figure is well above last year’s figure of 66% and the five-year average of 62%.
The Robusta harvest has now reached 88%, up from 83% in the same period last year and 80% of the historical average. The Arabica harvest is 58% complete, which is similar to last year, but above the five-year average (52%).
