26% U.S. Tariff Slams Indian Instant Coffee, Record Rainfall in Brazil Threatening Arabica Harvest: Can Colombia & Vietnam Fill the Gap?

Record‑High Robusta, Tightening Supply & Tariff Turbulence

The coffee market has entered the second quarter of 2025 balancing on a razor’s edge: London robusta is still orbiting the USD 5,200‑5,300 / t range while New York arabica holds near 375 ¢/lb, yet premiums for specialty grades are shrinking, stock levels are thin, and sudden tariff shocks are re‑mapping trade routes. Below is a complete, data‑driven narrative that connects every headline and figure shared in the latest dispatches.

Latest News (Chronological)
 

• April 21 – Futures plateau: Robusta (May) dipped 2.5 % to USD 5,253 / t; Arabica (May) eased 0.15 % to 375.5 ¢/lb. Week‑on‑week, both contracts are still higher, proving speculative longs remain committed.
   
• Early April – U.S. tariff pause: Washington’s 90‑day delay on “reciprocal tariffs” revived Vietnamese domestic prices from VND 118,000 to ≈ 130,000 / kg, reversing a sharp slide.
   
• April 15 – Specialty premium squeeze: India’s specialty premium collapsed to ≈ 10 % (long‑term norm: 25 %) as mainstream prices soar.
   
• April 8 – Vietnam export surge: February exports jumped 26.7 % m/m; average FOB soared to USD 5,561 / t—a 75.9 % y/y leap—thanks to Japan’s demand and global shortages.
   
• April 3 – India record exports: FY 2024‑25 coffee shipments hit USD 1.816 bn (+46 % y/y) on 389 kt, reflecting steady 350 kt production and stronger plantation grades.
  
   

 Latest Market Updates
 

• Price plateau, April 21 2025: Robusta for May delivery eased 2.5 % to USD 5,253 / t; Arabica for May slipped 0.15 % to 375.5 ¢/lb, but both contracts still sit far above their five‑year averages.
• Week‑on‑week momentum: The same May robusta leg is up USD 154 / t versus last week, and May arabica is still 17.8 ¢/lb higher—evidence speculative longs remain committed despite the muted daily move.
• Vietnam price snap‑back: After tumbling to VND 118,000 / kg on April 9 when Washington threatened reciprocal tariffs, Vietnamese domestic prices recovered to ~VND 130,000 / kg as the U.S. granted a 90‑day reprieve.
• Specialty premium squeeze: The gap between India’s specialty lots and mainstream grades has collapsed from 25 % to ≈ 10 %, the narrowest in years.
• Exports top seafood: Vietnam’s Q1 coffee exports earned USD 2.8 bn, eclipsing seafood for the first time and making coffee the country’s second‑largest farm‑sector earner after wood products.
  
   

Global Production Status
 

Brazil – Above‑average rainfall is forecast through June; larger bean sizes are likely, but persistent humidity raises fungal‑disease risk. The Real’s 6.2 % YTD appreciation is slowing farmer sales.

Vietnam – 2024/25 output is pegged at ≈ 26.5 million bags; an early outlook for the robusta crop that starts in October hints at 28 million bags if weather remains benign. February exports jumped 26.7 % m/m, average FOB price hitting USD 5,561 / t (up 75.9 % y/y).

Colombia – A record 14.9 million 60 kg sacks were harvested in 2024 (‑31 % YoY increase), but early‑2025 prices have softened from January highs.

India – Production has plateaued near 350,000 t for four seasons; value‑added initiatives pushed FY 2024‑25 exports to USD 1.816 bn on 389,000 t (up 46 % in value).

Peru – March exports shrank 54 % by volume yet rose 1 % by value as average price soared 119 % to USD 5.67 / kg; adverse weather in Brazil & Vietnam throttled global supply.

Emerging growers – Angola reaffirmed its commitment to the International Coffee Agreement, signaling policy continuity, while ICO members now cover 93 % of production and 63 % of world consumption.

Exporters, Importers & Trade Flows
 

• Vietnam → Japan – Buyers pivot to robusta for blend stability and to hedge against possible U.S. duties on Brazilian arabica.
• India → Europe – Italy, Germany, Belgium and Russia absorb the bulk of shipments as EU roasters diversify away from weather‑challenged Brazil & Vietnam.
• India → U.S. – About 9 kt instant coffee jeopardized by a 26 % tariff (Brazil & Ecuador pay 10 %); exporters courting Middle East, ASEAN and Eastern Europe.
• Peru → U.S. – The U.S. captured 23 % of March exports despite Peru’s 54 % volume drop, underscoring demand resilience for washed arabica.
• Vietnam (Q1) – Coffee revenues hit USD 2.8 bn, eclipsing seafood and making coffee the country’s second‑largest farm export after timber.
  
   

Product Quality, Harvest Timing & Bean Characteristics
 

• Brazilian arabica – Bigger, sweeter cups expected; monitor rust hotspots.
• Vietnamese robusta – High density, strong body; consistent colour after improved drying.
• Indian specialty – Complex florals and spice from Kodagu but slimmer premium margin.
• Colombian excelsos – Balanced acidity; record supply may soften differentials.

Harvest peaks: Brazil (May–Aug), Vietnam (Oct–Jan), India (Nov–Mar), Colombia (year‑round with main fly‑crop Sep–Dec).
 

Prices Now & Short‑Term Outlook
 

• Spot quotes – Green coffee ex‑Ho Chi Minh: EUR 3.90‑4.09 / kg.
• 3‑day window – Arabica likely USD 1.55‑1.65 / lb; Robusta ± USD 100 / t, guided by macro headlines and Brazil weather maps.
• May 2025 – Analysts see arabica USD 1.93‑2.00 / lb and robusta > USD 5,100 / t unless origin selling accelerates.
   

Market Analysis & Fundamental Signals
 

1. Stocks vs. demand – Strategic reserves in several origins are being drawn down faster than replenishment, providing a structural floor.
2. Speculative length – Funds remain net‑long; a sudden exit could shave USD 250‑300 / t off robusta.
3. Consumer elasticity – In Brazil, 50 % of households have switched to cheaper blends due to 5.48 % food CPI.
4. Currency factor – A firm Real curbs Brazilian offers, while a weaker USD inflates commodity prices—dual bullish forces.
    

Tariff & Policy Watch
 

• U.S. duty shock – 26 % on Indian instant vs 10 % on Brazilian/Ecuadorian reduces Indian competitiveness.
• Reciprocal‑tariff pause – 90‑day delay lifted Vietnamese prices but re‑application could spark fresh volatility.
• ICO / ICA – Angola’s ratification underscores renewed momentum toward sustainability and traceability benchmarks.
   

Strategic Insights for Momex Stakeholders
 

• Buyers – Lock in Q2‑Q3 needs before the U.S. tariff grace‑period expires; diversify with Vietnamese robusta and Indian plantation arabica.
• Sellers – Exploit the specialty‑premium squeeze to push volume; hedge margins via ICE option collars.
• Logistics planners – Plan for container constraints as Brazil’s harvest peaks; book slots early.
• Investors – Track the Brazilian Real; any reversal could unleash deferred selling and cool robusta’s rally.
   

Additional & Complementary Updates
 

• Colombia’s fisheries surge (4,105 t exported in January) underscores a broader ag‑trade boom that may tighten container availability for coffee.
   
• Inflation‑driven belt‑tightening in Brazil (61 % dine‑out reduction, 50 % switching to cheaper coffee) could moderate domestic demand growth in H2 2025.
   
• Peru shipped coffee to 24 destinations in March, down two from 2024; diversifying logistics hubs can buffer exporters from localized disruptions.
   
• Coffee now generates USD 2.8 bn for Vietnam in Q1 alone—second only to wood products—highlighting the bean’s growing macro importance.
   
• The specialty sector’s narrowing premium is not just an Indian story; roasters worldwide are rationalizing blends to offset expensive robusta, potentially redefining “baseline quality” in 2026 contracts.

Conclusion
 

April 2025 finds the coffee world at an inflection point: supply clouds gather over Brazil’s humid arabica belt, Vietnam’s robusta fills the vacuum at record prices, and tariffs threaten to redraw long‑standing trade corridors. Tight inventories, currency swings and a more price‑sensitive consumer base point to continued volatility rather than a quick reversion to pre‑rally norms. For growers, traders and roasters alike, agility—both geographic and contractual—will be the winning strategy. By proactively hedging, diversifying origins, and leveraging Momex’s marketplace tools, stakeholders can navigate 2025’s choppy but opportunity‑rich waters with confidence.

FAQ
 

What is the current coffee price in 2025?
As of 21 April 2025, London robusta futures hover around USD 5,253 per tonne and New York arabica trades near 375 cents per pound, some of the highest levels in a decade.
 

Why are coffee prices so high in 2025?
A perfect storm of adverse weather in Brazil and Vietnam, declining global stocks, speculative fund buying, and tariff uncertainty—especially the new 26 % U.S. duty on Indian instant coffee—has squeezed supply and fuelled a price rally.
 

How will U.S. tariffs affect the global coffee market?
The tariff disparity (26 % on Indian instant vs 10 % on Brazilian/Ecuadorian) is likely to divert U.S. demand toward Latin America, push Indian exporters to alternative markets, and inject fresh volatility into robusta and arabica price spreads.
 

Is Vietnam becoming the world’s leading coffee exporter?
Vietnam is already the top robusta exporter and, with February 2025 shipments up 32 % in value, its influence is growing—particularly as buyers hedge against potential supply gaps from Brazil.
 

What is the forecast for coffee prices in May 2025?
Analysts expect arabica to range USD 1.93‑2.00 per lb and robusta to remain firm above USD 5,100 per tonne, provided no massive origin selling or macro shock hits the market.
 

How can coffee buyers hedge against 2025’s volatility?
Diversify origin mix (Vietnam robusta, Indian arabica), lock in forward contracts before key tariff deadlines, and use ICE futures/options to cap upside risk while preserving exposure to any downside correction.