Food & Climate
Adverse weather conditions, particularly drought, continue to impact global coffee prices, although they have declined from last week’s peak. These prices, coupled with tariffs imposed by US President Donald Trump, represent a double whammy for companies, forcing Kraft Heinz to ask suppliers not to raise prices.
Coffee prices settled moderately higher on Thursday and are consolidating below last week’s highs. Last Tuesday, arabica coffee rose to a 2-1/2 month high, and robusta posted a 5-week high on concern about a smaller Brazilian coffee crop, according to a report seen by “Food & Climate” platform.
On April 22, Rabobank predicted Brazil’s 2025/26 arabica coffee crop would fall -13.6% y/y to 38.1 million bags, citing dry weather in key arabica-growing areas that significantly reduced flowering of coffee trees. On April 9, Cecafe reported that Brazil’s March green coffee exports fell -26% y/y to 2.95 million bags.
Coffee prices are supported by lackluster rainfall last week in Brazil. Somar Meteorologia reported Monday that Brazil’s biggest arabica coffee growing area of Minas Gerais, received 1.5 mm of rain in the week ended April 26, or 21% of the historical average.
Vietnam’s exports
Robusta coffee found support on Tuesday when Vietnam’s National Statistics Office reported that Vietnam’s 2025 Jan-Apr coffee exports were down -9.8% y/y to 663,000 MT.
Robusta coffee has support from reduced robusta production. Due to drought, Vietnam’s coffee production in the 2023/24 crop year dropped by -20% to 1.472 MMT, the smallest crop in four years. Also, Vietnam’s General Statistics Office reported that 2024 Vietnam coffee exports fell -17.1% y/y to 1.35 MMT.
On Tuesday, Vietnam’s National Statistics Office reported that Vietnam’s 2025 Jan-Apr coffee exports are down -9.8% y/y to 663,000 MT. In addition, the Vietnam Coffee and Cocoa Association on March 12 cut its 2024/25 Vietnam coffee production estimate to 26.5 million bags from a December estimate of 28 million bags.
Conversely, Rabobank predicted that Brazil’s 2025/26 robusta coffee crop would climb +7.3% y/y to a record 24.7 million bags.
Demand concerns are bearish for coffee prices
Demand concerns are bearish for coffee prices. Several global commodity importers, including Starbucks, Hershey, and Mondelez International, said the US’s baseline 10% tariff on imports would raise prices and further pressure sales volumes, according to “bar chart”.
So, food maker Kraft Heinz (KHC.O), which sells top U.S. coffee brand Maxwell House, has asked its coffee suppliers for 60 days’ notice before hiking prices due to Trump’s tariffs, according to a document seen by Reuters.
In the document sent in April, the company asked suppliers to raise prices only if the tariffs are permanent and to immediately reverse them if the levies are removed, underscoring the struggle U.S. companies face to contain the fallout from Trump’s erratic and punitive trade policies.
The document also dashes the hopes of investors in U.S.-based companies and Trump administration officials that companies with big buying power like Kraft Heinz could negotiate better deals from their suppliers to help offset tariffs.
Under the Green Coffee Association contract, which covers most shipments to the United States, tariff costs imposed at the market of destination “shall be borne by the buyer.”
The company also said in the document it hoped suppliers would work with it to “mitigate the impact” of tariffs.
The United States implemented a 10% universal tariff last month on all imported goods including coffee and is negotiating separate trade deals with different countries.
Trump paused plans for steeper tariffs on April 2, except for Chinese imports.
Coffee has not faced U.S. tariffs since colonial times, and both roasters and suppliers are grappling with how to handle them.
Kraft Heinz has bumped up its estimate for higher input costs this year to 5% from 3%, but its coffee cost increases are far bigger as raw bean prices have nearly doubled over the past year, thanks to adverse weather and crop shortfalls.
Roasters such as Kraft Heinz agreed on coffee prices months ago, when they entered contracts to buy raw beans from suppliers who source them from tropical regions, industry sources told Reuters.