March Market News: Specialty Coffee Market Insights and Trends
The coffee market retreated from previous highs in March. While some of the downward momentum was nothing short of a technical correction, much of it was fueled by the newfound bearish sentiment of the developing Brazilian crop.
After long periods of hot and dry weather, March saw rainfall return to key producing areas of Brazil’s coffee belt, improving crop conditions. As we get closer to the start of harvesting, more accurate assessments can be made about production totals. But was it a “too little, too late” scenario?
We saw a fresh wave of forecasts circulate, wide-ranging as expected, from 58 to 70 million bags. On April 2nd, StoneX released their second survey of the crop following an extensive crop tour between January and March. Based on their new observations, StoneX revised its production estimate downward, now forecasting 64.5 million bags—1.7% lower than the previous estimate and 2.1% below the 2024/25 crop. The estimate for arabica coffee was reduced to 38.7 million bags, a 3.3% drop compared to the previous forecast and a 13.5% decline from last season. Robusta production, on the other hand, is expected to reach 25.8 million bags, representing a 0.8% increase over the previous estimate and a 21.9% increase compared to the 2024/25 crop.
Discrepancies on the Brazilian crop totals may exist, but it seems there is an overwhelming consensus that Brazil will produce enough to satisfy both domestic and foreign demand; however, this new crop will not provide enough supplies to rebuild the country’s dwindling stockpiles.
The global coffee market has also been closely following the Trump administration’s decision to implement tariffs. First, Mexico and Canada being targeted with 25% tariffs. The US is the number one importer of green coffee from Mexico, accounting for over 55%, or around 1 million bags, of the country’s total exports. Mexican coffee imports account for approximately 4.5% of all green coffee imports into the US. The USDA forecast that for the October 2024 to September 2025 coffee year, Mexico will produce 3.85 million bags, with exports totaling 1.65 million bags of green coffee and 900,000 bags of soluble coffee. While the US doesn’t receive any green coffee from Canada, COMTRADE data shows that in 2024, processed coffee exports from Canada to the US were valued at approximately $45 million. The main destination for Canada's coffee exports is the United States.
Most recently, the US President announced he will impose a 10% tariff on all imports from all countries around the world, entering into effect at 12:01 EST on April 5th. Additional tariffs will be placed on imports from countries his administration believes have the most unfair trade relationships with the US. Other coffee-growing countries are impacted, including a 46% tariff for Vietnam, 32% for Indonesia, and 10% for Colombia, Brazil, Honduras and others. While the National Coffee Association (NCA) has been working at ensuring coffee is exempt from these tariffs, as of now, no final decision has been made.
The next few weeks will be very telling for the global coffee market. Will Brazil’s crop meet expectations? Will tariffs impact US consumption? One thing is certain…there won’t be a dull moment any time soon.
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