Since February, when the price of Arabica coffee termination contracts on the goods market reached the highest level (without inflation), there was some inheritance trend. In July, the price dropped to USD 2.76. Then the August blow, and the future of coffee once again approaches their peak price.
Prices reached USD 4.17 on MondayOnly 0.08 USD compared to the highest level in February. Uptick, like anyone who draws attention to global matters, can confirm, results primarily from the American tariff in Brazil. 50% tax on all imported goods from Brazil, including coffee, appeared on August 1STAnd since then the price has increased. In just a month and a half, it increased by almost 50%, which is one of the most critical jumps in history at that time.
There are still other factors that work in consultation with tariffs to augment prices. For BarchartLack of rain in the Brazilian regions of coffee cultivation “before the critical period of flowering of coffee trees” causes a price augment. Meanwhile, the Brazilian is at a 15-month level in relation to the dollar, which further discourages producers from coffee export. In addition, it is the fact that international stocks of replacement of goods Arabiki have 16-month low levels.
But the main problem is tariffs and it seems that there is no end in sight. Many American coffee buyers cancel contracts with Brazilian producers for other countries with smaller tariffs. The current administration stated that goods do not grow in the country, like coffee, can be released from tariffs, but only after the producing country has signed a trade agreement. And given that many believe that Brazilian tariffs are more politically motivated than fiscal – Brazil is one of the few countries for which America has a commercial surplus – the actual end of 50% of coffee tax from the largest exporter to the USA is not so clear.
