Inflation is causing prices to skyrocket at a tremendous rate. Now, one of the world’s best-selling beverages is suffering from these price increases. According to the latest Consumer Price Index, retail coffee prices in the United States rose nearly 21% year-over-year in August, the largest annual increase since October 1997. Roasted coffee increased 21.7% year-over-year and 4.1% month-over-month, while instant coffee increased 20.1% and 4.9%, respectively. Tariffs, the Donald Trump administration, and current circumstances are not helping the decline in food prices.
Coffee prices in the country are near record highs due to global production issues and import tariffs
With all this in mind, it’s important to keep in mind that the United States is the world’s largest coffee importer and relies on foreign countries for its beans, as there are very few places where it can be grown locally. Coffee prices in the country are near record highs due to global production issues and import tariffs, which could be directly reflected in the daily coffee consumed in American homes.
One of the countries most affected by tariffs is Brazil, which is the main source of coffee consumed in the United States
We’re talking about monthly increases, with coffee prices rising 4%, the largest increase in 14 years. From coffee shops to supermarkets, the price increases are more than evident. One of the countries most affected by tariffs is Brazil, which is the main source of coffee consumed in the United States, according to data from the United States Department of Agriculture. And it’s not just Brazil; almost all (99%) of the coffee consumed in the United States is imported, according to the National Coffee Association. The Food and Agriculture Organization of the United Nations (FAO) indicated that global coffee prices will rise 38.8% in 2024 due to production disruptions in Vietnam, Indonesia, and Brazil, countries that account for approximately half of the global supply.
Tariffs: A problem is more acute in countries like the US, which lack their own coffee production and must import almost 100%
This is a global problem that is even more acute in countries like the United States, which lack their own coffee production and must import almost 100 percent of their coffee. Added to this are certain climatic conditions that can affect coffee production. For example, Brazil is facing a dry climate that could affect this year’s harvest.
“Will easily surpass record levels as the full effects of the 50% tariffs imposed on Brazil last month”
Adding to this situation are the previously mentioned US tariffs, which imposed a 10% tax on coffee imports in April and an additional 50% on imports from Brazil at the end of July. Diane Swonk, chief economist at KPMG, predicted that coffee prices “will easily surpass record levels as the full effects of the 50% tariffs imposed on Brazil last month are reflected on store shelves.”
Colombia, the second-largest exporter by net weight, has a 10% tariff, and Vietnam, the third, has a 20%
According to some experts, Trump recently issued an executive order to allow the elimination of tariffs on products not available in sufficient quantities in the United States. Other coffee-producing countries were also affected by tariffs. Colombia, the second-largest exporter by net weight, has a 10% tariff, and Vietnam, the third, has a 20%. In any case, this “exemption” must be analyzed, as if not managed properly, it can affect other imported goods.
Ultimately, the reality is that consumers are already noticing the rising price of coffee. As we can see, international conflicts and trade relations between the United States and other countries always end up being reflected on the streets. That is, in food prices, in tax increases, and in consumer goods. Price increases that are not related to the salaries of the average citizen.
