The global market for Arabica coffee saw a sharp jump in August, with prices rising by more than 30 percent on London's Intercontinental Exchange (ICE), pushed up mainly by higher tariffs announced by the United States. This was stated by the Brazilian coffee exporters' council "Cecafe" (Cecafe), quoted by Reuters, writes BTA.
The 50 percent tariff imposed on Brazilian coffee by the administration of US President Donald Trump on August 6 has made exports to the US market unprofitable and disrupted market activity, said the president of "Cecafe" Marcio Ferreira.
"In the meetings I had with the American side, I made it clear that the increase in tariffs created an environment of uncertainty and pushed up coffee prices globally, and there may be no ceiling. "The market cannot predict where the price peak is," he said.
Arabica coffee futures on the ICE exchange in New York were trading at around 3.74 cents a pound today, up significantly from 2.80 cents at the end of July.
A harvest in Brazil, the world's largest producer and exporter of coffee, will not help ease the situation any time soon, Ferreira said.
The arabica coffee harvest, which is almost complete, is about 10 percent smaller than expected, and frost this month is likely to damage next year's production, Ferreira said.