FX.co ★ Arabica Coffee Prices Fall on Possible Tariff Exemption

Arabica coffee futures have recently dipped to $3.60 per pound, marking their lowest point in a month following reports indicating that U.S. lawmakers are set to introduce legislation aimed at exempting coffee imports from tariffs enforced since January 2017. This bipartisan initiative is intended to include roasted, decaffeinated coffee, as well as by-products like husks and skins. However, the bill would still require approval from President Trump even if it successfully passes through Congress. The coffee market has witnessed significant volatility, with arabica almost hitting record highs earlier in the week due to supply uncertainties and trade disruptions stemming from U.S. tariffs on Brazil, the leading coffee exporter globally. This proposed exemption has the potential to alleviate some pressures, as it may prompt Brazilian farmers to release their stockpiles, thereby increasing supply. Additionally, weather patterns remain a critical factor, with anticipated rainfall in Brazil being crucial for next year's crop outlook, while Vietnam braces for its largest robusta harvest in four years, which could further impact prices.