Trump's Tariff U-Turn Sends Coffee Prices Tanking

Coffee traders just got whiplashed. March arabica futures dropped 3.09% to a 7-week low, while January robusta fell 3.09% as well—all because Trump signed an executive order exempting Brazilian food products from tariffs, including that punchy 40% coffee levy.

Here’s what triggered the selloff:

The Brazil factor: The Brazilian real nosedived to a 1-month low, which actually helps Brazilian exporters push more coffee onto the market—bearish for prices. Add heavy rain forecasts in Brazil’s coffee belt (good for crop growth = bad for prices), and you’ve got a recipe for continued downside.

But wait, there’s a flip side: Vietnam’s robusta supply is getting squeezed. Heavy rains delayed harvests in Dak Lak province, Vietnam’s top coffee zone. Meanwhile, ICE arabica inventories hit a 1.75-year low (398,645 bags), and robusta stockpiles fell to a 4-month low. US buyers had been dumping Brazilian coffee orders when tariffs were in play, but now that the tariffs are getting waived, expect a flood of restocking.

The numbers that matter:

• Vietnam coffee exports rose 13.4% YoY in Jan-Oct 2025 (1.31 MMT)
• Brazil’s 2026/27 production forecast: +29% YoY to 47.2M bags of arabica
• Global coffee exports actually fell 0.3% YoY despite production gains

Bottom line: This tariff reversal is bearish now, but tighter global inventories could keep a floor under prices longer-term.