Brazil Coffee Tariffs Remain Amid Market Shifts

COFFEE

It turns out that Brazil only saw the 10% tariff on their exports lifted by the Trump Administration, leaving in place the 40% putative tariff that was enacted in response to the trial and conviction of former Brazilian President Bolsonaro. Most coffee producers in the Americas except Brazil saw their 10% tariffs lifted. Asian growers had even larger tariffs, which were also scrapped. This will bring some relief to tight US supplies, but with the US formerly buying some 30% of its coffee from Brazil, it will still leave a hole until product flows shift. Brazil is still reportedly working on a separate deal with the US. Traders have noted that robusta demand could pick up given the increased cost of arabica coffee for US consumers. World Weather Inc. expects rains for many Brazilian coffee areas, with more significant amounts later this week. Temperatures will cool to a seasonable range, which may help maintain a favorable outlook for soil moisture and crop development.  Reuters reported that Santos & Dias, the largest eucalyptus producer in Minas Gerais, and Ruiz Coffee, one of Brazil’s biggest coffee growers, plan to invest more than $187.5 million in a joint venture to create what would be the world’s largest Arabica coffee farm on continuous land. Planting will start in 2026. ICE certified stocks fell 2,400 bags yesterday to 400,790, the lowest since March 6, 2024. There were 3,094 bags of Brazilian coffee that passed grading and entered into the ICE warehouses in Antwerp. This is the time Brazil stocks have entered into ICE warehouses since April.

SUGAR

March Sugar is holding most of its gains from the breakout rally on Friday despite what appeared to be a bearish report from the International Sugar Organization yesterday, in which they forecasted a global sugar surplus of 1.63 million metric tons in the 2025/26 season (October/September). This would be up from a global deficit of 2.92 million for 2024/25. They expect production to increase 3.15% to 181.77 million metric tons, with consumption up 0.6% at 180.14 million. They cited increased production in India, Thailand and Pakistan, which not surprising given the ample monsoon rains this past summer. Last week, Datagro lowered its forecast for the 2025/26 global surplus to 1 million metric tons from a previous forecast of 2.8 million. India’s National Federation of Cooperative Sugar Factories said yesterday that it expects India to produce 31.5 million tons this season, with domestic consumption estimated around 29 million tons. They suggest this could allow for exports of 2-2.5 million. The shift towards more ethanol and less sugar in Brazilian crushing activity last month may point to a lower supply going forward.

COCOA

March Cocoa fell below Friday’s 12-month low briefly overnight, but so far it has avoided a selloff. A strong Ivory Coast arrivals pace, decent weather in West Africa, and a slow grind pace in Ivory Coast are all negative fundamental factors, but after declining $1,432 since November 5, prices may have fallen too far, too fast. Ivory Coast cocoa arrivals totaled 105,000 metric tons for the week ending November 16, down from 107,000 the previous week but up from 94,000 for the same week last year. This was the second week in a row that arrivals were above 100,000 and the third week in a row they were above year-ago levels. Cumulative arrivals for the 2025/26 marketing year have reached 516,000 tons, down 6% from a year ago. The gap keeps narrowing. Ivory Coast farmers told Reuters that light rains last week were good for the main crop, and they added that harvesting was intensifying. Harvest usually peaks in December. Ivory Coast’s cocoa grind has totaled 44,075 metric tons since the 2025/26 marketing year began on October 1, which is down 25.4% for the same period last year, according to the exporters’ association GEPEX. A story in Reuters highlighting the dire financial conditions the Ghanan regulator COCOBOD finds itself in could cause point to problems getting the Ghanan crop sold, or it could encourage smuggling.

COTTON

March Cotton extended its recent selloff overnight and fell to a new contract low, as the market continued to digest the bearish supply/demand report from Friday, which showed larger than expected US and World production and endings stocks for 2025/26 and significant increases from the previous report in September. The US stocks/use ratio is now estimated at 30.9% , the highest it has been since 2022/23. After a delay, USDA released its first weekly Crop Progress report since the shutdown late yesterday, and it showed 71% of the US cotton crop had been harvested as of November 16, down from 76% a year ago and just behind the five-year average for this date of 72%. Texas was 60% harvested, the same as a year ago and below the five-year average is 69%. With the market already hovering around 5-year lows and not that far from 15-year lows, the downside may be limited. The best thing the bulls can hope for may be is a resurgence in export sales and a lack of follow through on the downside.

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