Key control
- 50% tariffs in Brazil’s imports that will take effect next month will probably increase orange juice and coffee prices for US consumers.
- Brazil supplies a significant portion of the US market for these products, and there are limited supply alternatives.
- The prices for future deliveries of orange juice and coffee have increased following the tariff announcement of President Trump.
Plan to spend more on breakfast drinks in the near future.
The 50% rate of the Trump administration on Brazil, announced on July 9 and became valid in early August, directs a country that represents approximately 75% of orange juice global exports and more than half of the entire orange juice sold in the United States.
Coffee drinkers will not be saved. The largest coffee producer in the world, Brazil, supplied around 30% of all coffee beans imported to the United States last year.
The prices of both products have increased since the announcement of the administration. Frozen concentrated orange juice prices for future delivery have increased more than 10% in the last week, and coffee prices have increased by 6%.
There are no easy alternatives
Particularly for orange juice, increasing prices following the announcement of the rate reflect a simple reality: there are few alternatives to replace Brazilian supplies.
That is largely because US orange production has fallen substantially in the last two decades. The climatic challenges facing Florida and Texas Orange, shortage of labor and a devastating citrus disease have contributed to the decrease.
In the last 20 years, the surface dedicated to the production of the US orange. UU. It has fallen 50%. Florida’s production, the American state of greater production, has collapsed almost 90% during the same period.
There are more alternatives that could relieve the impact on coffee drinkers. Colombia supplies about 20% of the US coffee market, while Guatemala, Honduras, Peru and Vietnam represent approximately 5%. But these countries also face tariffs that could increase import costs and, ultimately, prices paid by consumers.
In addition, coffee drinkers who use sugar could be beaten twice. Brazil is the largest sugar producer in the world; Their shipments to the US are subject to an exempt import tax fee. It is not clear how the new fee affects that quota, but any supply that presumably exceeds it would face the complete tax of 50%. Prices for future sugar deliveries have increased 6% in the last month.
