Every Friday, Perfect Daily Grind rounds up the top coffee industry news from the week.
After reaching an all-time high in mid-December 2024, arabica futures have since been on a steady upward trajectory, compounded by ongoing supply shortages in Brazil and Vietnam.
But this week, in a shocking turn of events that caused futures to hit another historic record high (this time US $3.73/lb), US President Donald Trump threatened Colombia with a staggering 25% tariff on all exported goods. Naturally, given the country’s position as the world’s third-biggest producer, this would have included coffee.
Although Trump quickly rescinded the punitive tariffs, which were in response to Colombian President Petro barring two military planes carrying deported migrants from landing, the threat alone was enough to drive arabica futures to new heights. To avoid a US-Colombia trade war, Petro agreed to accept the deported migrants “without limitation or delay”.
If imposed, the tariffs would have had devastating consequences for both the US and Colombia, which the FNC and NCA reiterated in a joint statement published on Tuesday. Colombia is the second-biggest supplier of coffee to the US market, making it essential to meet the demand for America’s favourite beverage, according to the NCA’s data. Considering that the US only grows negligible amounts of coffee in Hawaii (and even less in California), the country is far from meeting its own demand.
A key part of Trump’s immigration policy is the mass deportation of allegedly undocumented migrants, which, given its proximity to the US, is primarily related to Latin American countries, including those that grow coffee. If other leaders hesitate or refuse to comply, it could spell more threats to increase tariffs – raising coffee futures even higher.
With or without tariffs, however, coffee prices will continue rising. It’s becoming increasingly apparent that the year ahead will be characterised by persistent market volatility that keeps traders, roasters, and producers hedging their bets.
Photo credits: Producer & Roaster Forum
Want to keep up with current affairs in the coffee industry? Check out last week’s coffee news stories and make sure to read the latest Coffee Intelligence News & Opinion piece on why Bialetti’s buyout signals rising demand for convenience.
Passionate about music and coffee, not necessarily in that order. He has been writing about both, and many other things, since 2005.
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