Insight Focus
US tariffs disrupt Brazilian coffee exports. New contract negotiations are slowing, threatening both conventional and specialty coffee sales. Redirecting shipments will be difficult, though emerging opportunities exist in Asia and the Middle East.
Tariffs Disrupt Brazil’s Coffee Market Momentum
Normally, the prospect of a positive harvest after challenging cycles due to adverse weather conditions would lift coffee growers’ spirits. Production continues to grow—this year, 55.67 million 60-kilogram bags are expected, 2.7% more than the previous season, according to Conab.
Source: Conab
This year, however, the situation has been different. Since the 50% tariffs imposed by the US went into effect in August, the climate in the Brazilian coffee market has soured. “There hasn’t been a suspension of contracts yet, but the pace of negotiations has slowed significantly,” says Aguinaldo Lima, executive director of the Brazilian Coffee Industry Association.
As time passes, apprehension grows. So far, there is no visible sign of a potential reversal of the tariffs, although Brazilian producers and exporters have maintained dialogue with the industry and the US government.
If nothing changes, Brazil risks losing its position as the leading coffee supplier to the US, the world’s largest buyer. “With current tariffs, exporting to the US may become unviable,” says Marcio Ferreira, president of the Brazilian Coffee Exporters Council.
Source: USDA
Much of the American industry has stocks that should last between 30 and 60 days. But US importers are already starting to look at other markets. One of them is Colombia, subject to a much lower tariff of 10%. Mexico, another important supplier of the commodity to the US, is also on the radar.
These countries —like Brazil— are major producers of the Arabica variety, preferred by Americans. About 92% of all coffee imports into the US have historically been Arabica, according to the USDA.
However, Robusta coffee gradually gained a foothold in the American market, thanks to its lower production costs and competitive pricing. Much of the Robusta consumed in the US—sourced largely from countries such as Vietnam—is used in instant coffee and blended products, where it provides higher added value.
With the of new US tariffs, questions have emerged about how much producers like Vietnam can expand Robusta shipments to American ports. For now, the answer remains uncertain, as it will depend on consumer preferences, price dynamics, and broader geopolitical factors.
Reconfigurations of Trade Flows Affect Prices
With firm demand and an expected drop in global supply due to the US tariff hike—particularly in relation to Brazil—international coffee prices rose around 30% in August. The effects of the new US import tariffs, however, are expected to have a greater impact in the coming months.
Source: Comex
Traditionally, Brazilian exports increase between September and November. This year, however, a smaller volume of Brazilian coffee may reach ports.
Some producers are choosing to store part of the crop in the hope that tariffs may be reversed. The drop in prices in the Brazilian market is also contributing to this decision. In July, there was deflation in the price of coffee of around 1%, contrary to a long period of 18 months in which climate issues damaged crops.
The coming months will help guide new analyses of price behavior in 2026. Until President Donald Trump’s tariffs went into effect, the general expectation was for global prices to fall due to better harvests in Brazil and Colombia. Although some analysts continue to support this argument, part of the market is revising its projections.
Brazil Considers Alternative Routes to Sustain US Supply
On the Brazilian side, there is the possibility of an eventual increase in exports to European countries, which are among the main buyers of Brazilian coffee. But this is not a simple move. “Demand doesn’t usually increase enough to significantly stimulate new shipments,” says Lima.
Source: Comex
Without easy short-term solutions, coffee growers are beginning to count losses. At the same time, new alternatives are being studied. One of them is selling coffee to Colombia and Mexico, which would re-export the product to the US. The strategy is to continue supplying the American market, but indirectly.
The recent authorization of 183 Brazilian establishments to export coffee to China also opened a new window of opportunity, although the country is not yet among the main buyers of Brazilian coffee.
Specialty Coffees in the Spotlight
The specialty coffee market, which has higher added value, faces a similar dilemma, with the US driving Brazilian exports. The rest of the sales are concentrated in ten countries, including Germany and Belgium.
Source: Cecafé.
The lack of export diversification represents an additional aggravating factor in this scenario. “Demand in purchasing countries is unlikely to grow enough to offset exports to the US,” assesses Vinicius Estrela, executive director of the Brazilian Specialty Coffee Association. There are also reports that some importers are trying to reduce the premium paid for Brazilian coffee.
Vinicius Estrela, Publicity photo
Regarding US-based customers, the main movement has been to seek other suppliers. Countries like Panama, known for its fertile volcanic soils where high-quality Arabica coffee is grown, are considered natural candidates to meet American demand. Ethiopia, which offers a wide variety of Arabica beans—the American favourite—is also well-positioned in this scenario, as is Colombia.
On the map of new destinations for Brazilian specialty coffee, China and the Middle East have been emerging more prominently. In China, rising incomes have been stimulating the consumption of specialty coffees, sold in retail and coffee shops.
In the Middle East, the United Arab Emirates and Saudi Arabia have driven the increase in demand, with multinationals in the sector establishing themselves in the region and the popularisation of specialty coffee consumption. In the short term, however, there should be no significant changes in export flows.
