Tariff removal brings relief to coffee, but low stocks support prices

Global coffee market has been in a moment of transition after removal of 40% additional tariffs on Brazilian coffee beans (except for instant coffee), announced in November 20^th. Despite the measure has brought immediate relief, low stocks in consumer markets, added to climate challenges at key origins, indicate that high prices might keep supported in short term.

Tariff removal

Initially, the decision of the United States Government to remove additional tariffs has pressed Arabica futures, that hit two-month lows. However, prices have partially recovered in the following days, sustained by scarce stocks and cautious position of Brazilian producers that are still reticent on selling significant volumes from crop 25/26. “Such behavior highlights the perception that, even with the relief from tariffs, offer is still limited”, said Laleska Moda, Analyst of Hedgepoint.

Initially, the decision of the United States Government to remove additional tariffs has pressed Arabica futures, that hit two-month lows. However, prices have partially recovered in the following days, sustained by scarce stocks and cautious position of Brazilian producers that are still reticent on selling significant volumes from crop 25/26. “Such behavior highlights the perception that, even with the relief from tariffs, offer is still limited”, said Laleska Moda, Analyst of Hedgepoint.

Arabica certified stocks are still in historical lows. And closed in 406.9 thousand bags in the first week of December, dropping 54.96% in the year-to-date period. Robusta stocks have also dropped, hitting 755 thousand bags. Meanwhile, Vietnam harvest is still delayed due to intense rainfall and storms related to La Niña. At buying countries, the situation is not different. Stocks in European Union have decreased to 7.8 million bags, the lowest level since May. In Japan stocks have also been below historical average.

Recovery

Demand shows signs of recovery in spite of scarcity. Apparent consumption in EU closed 24/25 crop above 10-year average. And it started 25/26 season with strength, pushed by winter in North Hemisphere. Such scenario, in addition to low stocks, might sustain prices in the short term, with support for contract March/26 (KCK6) around 350 c/lb. O the other hand, corrections might occur in 2026, as crop 26/27 in Brazil is evolving well, and new offers from Vietnam and Central America enter the market.

According to Moda, the removal of tariffs has been a positive factor to the market. although it does not settle the main challenge. “The stocks remain in historically low levels. In addition, delays in Vietnam harvest, and the cautious position of Brazilian coffee growers might keep supportive to prices in the short term”, says Laleska Moda.