MILAN – The collapse of stock markets following Trump’s announcement of tariffs did not affect coffee futures, which suffered limited losses: in London, the front month even closed higher. On a day when Wall Street burned $2 trillion, the European stock markets €422 billion and oil lost up to 7%, coffee futures posted moderate declines, reflecting solid fundamentals but also fears that the high tariffs imposed on some major producing countries could weigh on the supply chain of the United States, the world’s leading coffee consumer.
Markets were also supported by the negative trend in the dollar and a cut in Brazilian production estimates by StoneX.
In New York, the May contract fell less than 1% (360 points) to 385.25 cents.
On the Ice Robusta, the May contract was marginally higher (+$5) at $5,371, while the most traded July contract, lost $12 to settle at $5,388, still in contango.
London’s performance was affected by the White House’s decision to impose tariffs of 46% on Vietnam and 32% on Indonesia, which will make imports of Robusta coffee more expensive for the US industry.
A “milder” 10% tariff will be imposed on imports from Brazil and Colombia.
“The tariff on Vietnam means $2,500 more per ton” for a U.S. buyer, said a European trader quoted by Reuters.
It is still unclear wether beans already en route to the U.S. are also subject to the large tariff, he noted.
Both the coffee industry and candy manufacturers will lobby hard to have the tariffs removed from coffee and cocoa said Judith Ganes, an authoritative soft commodities analyst and president of J Ganes Consulting. “I personally doubt the tariffs will stick,” she added.
There are those who believe that the American industry will shift from Vietnam’s Robustas to Brazil’s. This would increase the availability of Asian origin Robusta to the rest of the world.
Meanwhile, StoneX has cut its estimate for the upcoming Brazilian crop by 1.7% to 64.5 million bags.
The downward correction is exclusively for the Arabica crop, which is now forecast at 38.7 million, down from 40 million last November. There was a slight upward revision for the Robusta crop, now estimated at 25.8 million, up from 25.6 million.
The downward revision for Arabica production is due to the negative impact of the weather, especially in São Paulo, explained Fernando Maximiliano, analyst at StoneX, who also cited weather problems in Espírito Santo, Matas de Minas and Sul de Minas Gerais.
Harvesting of the new crop will start in the middle of the month in the Robusta areas and will intensify from May onwards.
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