Introduction & Context
Coffee’s supply chain is highly sensitive to weather changes. Past disruptions—frosts, droughts—have triggered global price spikes. Now, additional US tariffs levy duties on coffee imports from countries that previously enjoyed duty-free status. The combined effect leaves roasters struggling with cost unpredictability.
Background & History
Historically, major coffee surpluses from Brazil and Vietnam stabilized global prices. But the 2024–25 Brazilian season saw multi-decade low rainfall, severely hurting arabica output. Tariff talk emerged as the US escalated trade disputes in early 2025, targeting a range of agricultural goods. Coffee shipments that once entered easily now face extra fees at customs.
Key Stakeholders & Perspectives
- Coffee farmers in climate-stressed regions see yields fall, revenues dropping unless they raise prices.
- US roasters must either absorb higher costs or pass them on, often a tough choice for small businesses.
- Consumers risk “latte shock,” as a beloved daily beverage creeps toward premium pricing.
- The White House contends tariffs will spur domestic roasters to source or roast more coffee domestically—critics call that unrealistic as coffee-growing in the US is minimal.
Analysis & Implications
If coffee becomes more expensive, some consumers might reduce consumption, impacting cafés and reorienting household budgets. Higher revenue might help farmers invest in adaptation or new cultivars, but only if the supply chain fairly redistributes profits. Unsustainable farming practices might worsen climate damage, forming a vicious cycle of diminished supply and rising prices.
Looking Ahead
Meteorologists warn Brazil’s climate volatility may continue. If so, supply disruptions remain. Meanwhile, any shift in US tariff policies could quickly alter coffee import costs. Some roasters plan hedges or forward contracts to mitigate price jumps. Global groups push for climate-resilient coffee strains, but widespread adoption might take years.
Our Experts' Perspectives
- Coffee price swings illustrate how climate extremes and trade wars converge, straining commodity markets.
- Innovations—like lab-grown coffee or drought-tolerant beans—could ease future disruptions, though readiness is years away.
- Tariff unpredictability undermines roasters’ ability to plan stable pricing.
- Many farmers at origin can’t easily pivot crops, so they endure higher risk from erratic weather patterns.
- Experts remain uncertain if global efforts can stabilize coffee production before major consumer markets see permanent price spikes.