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2:11 PM · 16 July 2025

Coffee surges 3% amid lack of rain in Brazil

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Coffee futures (COFFEE) are rebounding by over 3% today, attempting to reverse the downward trend that has driven coffee contract prices to their lowest levels since September 2024. The main driver behind the gains is a lack of rainfall in Brazil. According to data from Brazil’s Somar Meteorologia, the Minas Gerais region—a key area for Arabica cultivation—received no rainfall last week. No rain is forecast for this week either, which may deteriorate crop quality and gradually disrupt supply from this crucial market.

Additionally, the uncertain future of Trump-era tariffs on Brazil, which could potentially be extended to include coffee, is fueling volatility and uncertainty. Vietnam, another key player in the coffee market, is also at risk of facing tariffs ranging from 20% to even 40%. Indonesia and Cambodia, important links in the U.S. coffee supply chain, have already been hit with 32% and 25% tariffs, respectively—measures that could raise the cost of imported coffee in the U.S. In 2024, the U.S. imported 1.6 million tons of coffee, with 8.1 million tons coming from Brazil, according to data from Cecafe.

Source: xStation5

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