Brazil, the world\u2019s largest coffee producer, has faced adverse weather, while Vietnam, which, along with Brazil, accounts for nearly half of global output, has been hit by prolonged dry spells that caused a 20% drop in production in 2023\/24.<\/p>\n\n\n\n
Vietnam’s exports have fallen for two consecutive years, while Indonesia has struggled with excessive rains damaging coffee cherries. This has resulted in a 16.5% production decline and a 23% slump in exports.<\/p>\n\n\n\n
These supply shocks, combined with higher global shipping costs, have filtered through to consumers worldwide. <\/p>\n\n\n\n
Local coffee roastery Quaffee has echoed<\/a> these concerns, warning that coffee shortages, rising fertiliser and labour costs, strong global demand, and currency fluctuations all put upward pressure on South African coffee prices.<\/p>\n\n\n\n However, despite these challenges, some economists noted that the US tariffs could change the dynamic.<\/p>\n\n\n\n On 7 August, the US imposed a 30% tariff on South African goods. While Pretoria has said it does not plan to retaliate, it is pushing for a revised trade deal with the US that could be mutually beneficial. <\/p>\n\n\n\n More importantly, America\u2019s trade war has hit several of the world\u2019s major agricultural producers. Brazil and India now face 50% tariffs, Vietnam 20%, Japan 15%, and China has been struck with heavy duties across several product categories. <\/p>\n\n\n\n President Donald Trump has further threatened to add a blanket 10% tariff on all BRICS nations aligned with what he calls \u201canti-American\u201d policies.<\/p>\n\n\n\n Economists said that these countries are losing lucrative access to the American market and will have to find new buyers for their goods. <\/p>\n\n\n\n \u201cFor now, every country is looking for an alternative in terms of where they can sell the products that they were sending to the US, but that is not going to be easy,\u201d explained Thabile Nkunjane, an economist at the National Agricultural Marketing Council (NAMC). <\/p>\n\n\n\n \u201cThat means that there is going to probably be a bit of an influx of some of the products, especially those that were being sent to that market.\u201d<\/p>\n\n\n\n For South Africa, this could be good news when it comes to coffee imports. Brazil, which supplies the bulk of the local market, now faces the dilemma of securing new buyers quickly or offloading its coffee at discounted prices. <\/p>\n\n\n\nSilver lining for South Africa’s coffee prices <\/h2>\n\n\n\n
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