Cocoa and coffee prices have plunged on global markets as traders have been unsettled by a wave of US tariffs, stoking concerns about demand.
US President Donald Trump declared “Liberation Day” on Wednesday by announcing 10 percent tariffs on imports from countries around the world. Washington is also planning additional “reciprocal” tariffs, citing trade deficits with a number of trading partners.
The tariff wave has also shaken global commodity markets.
Cocoa futures prices fell 3.1 percent on Monday in London’s futures contract from last week’s close to 6,171 pounds per tonne ($7,907).
US consumers consume the most chocolate in the world, and the US is also the world’s largest importer of processed cocoa products, such as cocoa butter. Such products arrive on the American market from the European Union, Malaysia and Indonesia, which will now pay customs duties of 20, 24 and 32 percent, respectively.
Tariffs could dampen U.S. demand for chocolate, but traders note that falling cocoa prices are somewhat limiting fears of a possible supply cut. In the main agricultural season, which runs from April 1 to September 30, the world’s largest producer, Ivory Coast, is expected to record its worst harvest in ten years.
Coffee prices also fell, so Arabica was traded on the ICE futures market after noon on Friday at a price of $3.7395 per pound (about 0.45 kilograms), three percent lower than at the close of trading on Thursday.
Arabica fell 0.6 percent on Monday compared to Friday’s close, to $3.6335 per pound (a little less than half a kilogram). It was briefly down to just $3,555. On Friday, it had fallen by about three percent.
The price of robusta was down three percent on Monday after noon and stood at $4,972 per ton.
“After the ‘liberation’, numerous shipments of producers to whom the US imposed the highest tariffs will enter the labyrinth in search of demand in other countries,” explain the analysts of the Dutch bank Rabobank in the report.
That new demand will include an “efficiency cost”, they add.
The US has not charged customs duties on coffee imports since the 18th century, and the levies will increase costs and further complicate the operations of American importers and roasters who are already struggling with extremely high coffee prices, traders pointed out.
From November 2024 to March of this year, Arabica prices in futures contracts on the ICE exchange rose as much as 70 percent due to a bad harvest in Brazil and other major producing regions.
The world’s largest producer of robusta is Vietnam, which ranks third in the ranking of coffee suppliers for the American market. The USA is the largest consumer of coffee in the world.
