The week was dominated by the impact of the removal of U.S. tariffs on Brazilian coffee, a measure that reshaped price behavior in the futures markets. In New York, the March/26 contract closed the week down 1.4%, giving back part of the previous gains as the market absorbed the end of the additional 40% duty. The tariff normalization reduces costs, removes uncertainty, and is expected to release large volumes of Brazilian coffee that had been kept in storage, increasing availability for U.S. roasters. In London, robusta ended the week mixed: it fell in the last session but still accumulated a weekly gain of 6.5% in the January/26 contract, supported by technical factors and ongoing concerns about Vietnamese production.
Among the week’s main highlights, the tariff removal had a significant structural effect on the sector. The move should restore the flow of Brazilian exports to the U.S. after months of inflated costs and competitive distortions. At the U.S. retail level, coffee prices had risen by as much as 40% this year, pressuring for change and generating dissatisfaction among consumers. The decision was well received by the industry and the public, but it opens a new phase: U.S. buyers are expected to reassess their procurement strategies, rebuild inventories, and re-evaluate preferred origins, which may influence demand patterns in the coming weeks. Robusta also reacted in a particular way. The recent recovery was partially limited after the U.S. announcement but remained supported by supply challenges in Vietnam, where floods and landslides disrupted harvest and shipments. Forecasts of continued rainfall reinforce the concern over prolonged delays and potential supply cuts.
ICE US certified stocks continued to decline, reflecting the extended period of tariffs, which had reduced the flow of certified coffees from Brazil. The reduction still offers some support to prices, although not enough to prevent the correction in arabica after the removal of the tariff measure.
On the weather front, conditions in Brazil improved throughout the week, with more frequent rainfall benefiting the development of arabica for the 2026 crop. The more favorable climate pressured prices in New York by lowering the risk premium associated with supply. In contrast, Vietnam faces more severe issues: heavy rains caused floods, landslides, and delays in the robusta harvest, in addition to compromising parts of internal logistics. Expectations of further rainfall keep the market on alert. In Colombia, the 2025/26 harvest progresses under challenging conditions. Persistent rains are likely to limit productive potential and may delay flowering in the south. Current estimates point to approximately 13.5 million bags, a 5.6% decline from the previous cycle. Mexico and Central America, on the other hand, are expected to show stable or slightly higher production in 2025/26, totaling around 17.2 million bags, a scenario that should soften part of the global supply pressure.
In the macroeconomic environment, a stronger dollar and lower oil prices reinforced the bearish trend in arabica midweek, alongside technical repositioning after recent gains. The removal of U.S. tariffs eliminated a factor that had been distorting prices and trade flows since August, bringing greater predictability for exporters and buyers. Even so, the rebalancing of flows and the adjustment of procurement strategies by U.S. roasters should generate short-term volatility.
Looking ahead, the market enters next week searching for a new balance. Arabica is expected to remain under moderate downward pressure in the short term, influenced by improved weather conditions in Brazil and the release of stored Brazilian stocks after tariff removal. For robusta, the focus remains on Vietnam, where weather conditions continue to be the main risk factor. Overall, the environment is one of transition: tariff normalization reduces noise and restores fundamentals, while climate, Asian supply, and shifts in U.S. demand will determine price direction in the coming weeks.
Analysis done by Adelso Zamprogno