Arabica Shortage and Sky-High Tariffs: A Perfect Storm for Green Coffee Traders

Global wholesale green coffee markets are facing historic supply constraints. Volcafe projects a staggering 8.5 million bag deficit in arabica for the 2025/26 season, widening from a 5.5 million bag shortfall in 2024/25 and marking the fifth consecutive year of supply deficits (nasdaq.com). Meanwhile, arabica futures surged to an all-time high of US $4.41 per pound in early 2025, more than doubling from the previous year (perfectdailygrind.com). Tight markets and rising commodity prices are putting pressure on margins for wholesale buyers and roasters alike.

Tariff policies are now adding another layer of complexity. The U.S. “Liberation Day” tariff package imposes a baseline 10 % duty on most coffee imports and up to 50 % on Brazilian beans, which account for roughly 30 % of U.S. consumption (businessinsider.com, washingtonpost.com). These measures come on top of climate-driven supply shocks, such as persistent droughts in Brazil, which have increased production costs across the green coffee value chain (businessinsider.com). This combination of scarcity and protectionism is forcing traders and roasters to rethink sourcing strategies and pricing models.

There is, however, a glimmer of hope. Brazil’s officials have revised upward their production forecasts, raising expectations for a more robust 2025 harvest and offering potential relief for global prices if yields meet projections (cropgpt.ai). For traders and wholesalers, the path forward lies in diversifying partners, securing flexible contracts, and closely monitoring shifting forecasts. Proactive adaptation to market volatility today could safeguard both supply stability and profitability in the months ahead.