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Informist, Monday, Oct. 6, 2025

 

MUMBAI – BMI, a Fitch Solutions group company, expects coffee prices to average 340 cents per pound (1 pount = 0.45 kilogram) in 2025, up from its previous forecast of 300 cents per pound, following a recent price rally driven by US tariffs on Brazil. The US in August had imposed 50% tariffs on Brazilian imports. However, the high coffee prices make it very likely that the US and Brazil would agree to remove the 50% tariffs on coffee imports, which would cause prices to drop from their recent peaks. The biggest risk to the market is the unpredictable nature of US trade policy, which could change suddenly, causing prices to either rise or fall, BMI said. 

 

"...the recent developments suggest that there is a potential for negotiation on coffee tariffs, particularly given that tariffs on coffee, unlike other products, are unlikely to stimulate investment in US production due to climatic limitations," BMI said in a report released Monday. The implementation of 50% US tariff on the Brazilian imports including coffee resulted in a supply crunch within the US, placing upward pressure on prices. The average price for coffee in US cities rose 5.4% on month and 40.6% on year in August.

 

In the long term, prices are expected to ease in 2026, averaging at 300 cents per pound, BMI said. "In terms of demand, we highlight the growing importance of non-traditional markets such as Mainland China, India and Vietnam, which have posted the highest growth rates over recent years," it said. As coffee demand growth in established consumer markets including the European Union and the US has slowed down, demand in emerging markets will become increasingly relevant in determining coffee futures prices, it added.

 

On the production side, global coffee production is expected to increase 1.7% on year in 2025-26 and global coffee consumption will increase 1% on year. Favourable weather conditions in Vietnam are expected to result in a recovery of production in the country. BMI expects production to increase in Brazil and Vietnam by 0.4% and 5.2% on year, respectively, in 2025-26. Brazil and Vietnam are the largest global producers and exporters of coffee. "We expect that consumption will remain strong despite price increases due to the relative inelasticity of coffee demand in the EU and the US, the largest consuming markets," BMI said.  End

 

US$1 = INR 88.78

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Udita S. Jaiswal

Edited by Tanima Banerjee

 

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