Global Cocoa, Coffee, and Sugar Prices Drop Amid Trump’s Tariff Announcement

World cocoa, coffee, and sugar prices fell on Wednesday as investors reacted to former U.S. President Donald Trump's decision to impose heavy tariffs on U.S. imports, raising concerns about a potential decline in chocolate and coffee demand in one of the world's largest consumer markets. 

Tariffs and Market Impact 

Trump announced a 10% baseline tariff on all U.S. imports, with some reaching more than 50%, triggering uncertainty across global markets and reversing decades of trade liberalization. 

• Vietnam and Indonesia, the world's top robusta coffee producers, now face 46% and 32% tariffs, respectively.
• Brazil, a leading arabica coffee and sugar producer, was hit with a 10% tariff.
• Ivory Coast and Ghana, the top cocoa growers, face 21% and 10% tariffs, respectively.
• The U.S., which imports significant amounts of processed cocoa products such as butter and powder from the EU, Malaysia, and Indonesia, imposed 20% tariffs on the EU, 24% on Malaysia, and 32% on Indonesia.

A Europe-based coffee trader commented on the situation:

"We don’t yet know the full impact, but there are no winners. This is bad for everyone. For the U.S., it’s inflationary, while other exporters risk losing access to a huge market."

Commodity Price Movements 

Following the tariff announcement, prices across major agricultural commodities fluctuated: 

• Arabica coffee futures on the ICE exchange dropped 0.7% to $3.8605 per pound, after an earlier decline of nearly 3%.
• Robusta coffee futures fell 0.1% to $5,393 per metric ton, after initially dropping 2.5%.
• London cocoa futures declined 1.9% to £6,654 per ton, after an earlier drop of nearly 5%.
• New York cocoa futures, however, rose 3.3% to $9,262 per ton, after surging nearly 6% earlier in the session.

Dollar’s Influence on Cocoa Prices 

The U.S. dollar’s weakness played a role in New York cocoa futures rising, as investors shifted towards bonds and gold in response to the unexpected tariff hikes. A weaker dollar makes dollar-priced cocoa more affordable for global buyers, while strengthening the British pound made London cocoa less attractive to non-UK investors, prompting them to sell. 

With these tariff changes disrupting global trade flows, market participants are bracing for further volatility in cocoa, coffee, and sugar prices in the coming months.

Follow & Subscribe:
👉 Agri-Food Update on LinkedIn for the latest updates and insights.
🌐 Visit us at www.agri-food-update.com for more information!