Decline in Coffee and Cocoa Prices Under Pressure from Tariffs and Weather Conditions

According to HUP data, the price of robusta coffee fell by 1.7 percent during March, and the negative trend continued into the second week of April, when the price reached around 342 cents per pound. The price reduction is a result of the introduction of tariffs by the United States on coffee from countries such as Vietnam and Indonesia, which are among the largest global producers of robusta.

The market reacted with a decline due to expectations of reduced demand, as higher prices on shelves could discourage end consumers. Additionally, the strong depreciation of the Brazilian real against the dollar has spurred an increase in coffee exports from Brazil, thereby increasing supply in the global market. Favorable weather conditions for harvesting also support this.

Despite surpluses, the Vietnam Coffee and Cocoa Association has lowered its robusta production forecast, expecting seasonal production to be 1.5 million bags lower than the initially estimated 26.5 million. Accordingly, HUP expects continued volatility and a movement of the robusta price at around 350 dollars per pound.

A similar dynamic characterizes the cocoa market. In March, a monthly price drop of nearly 19% was recorded, and prices remain under negative pressure at the beginning of April. The cause, as noted by HUP, is the new U.S. tariffs on all imports from African countries, including key producers such as Côte d’Ivoire and Ghana.

As the U.S. is the largest global importer of chocolate and cocoa products, the increase in import costs could reduce consumption in that market. Furthermore, a prolonged drought in Côte d’Ivoire could result in the weakest cocoa harvest in the last decade, further straining supply.

Major confectionery producers, such as Hershey and Mondelez, warn of a potential price increase of their products by up to 50 percent, which could prompt the industry to seek alternative raw materials in place of cocoa.

HUP forecasts that cocoa prices will stabilize in the coming months at around 8,500 dollars per ton, with continued pronounced volatility due to geopolitical and climatic factors.