Coffee Prices Surge 14.5% Year-on-Year, Tariffs May Drive Further Increases

Coffee prices have continued to surge, and the situation may worsen. The pressure on coffee lovers shows no signs of easing. According to data from the U.S. Bureau of Labor Statistics, coffee prices in July rose 14.5% year-on-year, with the average retail price per pound of ground coffee reaching 8.41 dollars. This price was recorded before a 50% tariff was imposed on imported coffee from Brazil, the world's largest coffee-producing country, which could further drive up coffee prices.

Analysts from Bernstein predict that the tariff could lead to a 15% to 20% increase in the retail price of ground coffee. Importers may turn to alternative suppliers such as Vietnam and Colombia. A report from the United Nations Food and Agriculture Organization indicates that even before the tariff was imposed, coffee prices had been rising due to adverse weather conditions in major coffee-producing countries. In 2024, coffee prices were 38.8% higher than the average level of the previous year. Meanwhile, coffee demand is expected to increase significantly.

Economists from the U.S. Cooperative Bank's Knowledge Exchange Research Department have noted that rising coffee prices may encourage consumers to drink more coffee at home. "Consumers will continue to drink coffee," they said. "The question is where they will ultimately drink it."