Coffee prices in the United States are heading toward their highest levels in history, driven by rising import tariffs and soaring global coffee prices, at a time when the US has no choice but to import due to its unsuitable climate for coffee production, according to CNN.
Carlos Mera, head of agricultural commodities at Rabobank said that retail coffee prices could rise by 30% by 2025. He added, "Large-batch coffee prices could rise by about a third compared to last year."
US President Donald Trump surprised the market by announcing a new 10% tariff on coffee imports, after he had imposed a 46 percent "reciprocal tariff" on Vietnam, a major coffee exporter.
Although these higher tariffs were later lifted, the current general tariffs mean a 10% increase in import costs, at a time when the price of Arabica coffee reached more than $4 per pound in February, a record high.
TJ Siemenshen, owner of Wonderstate Coffee, said his prices rose 15-20% in March and expects an additional $1 increase per bag at wholesale. "Coffee has never been this expensive," he said, according to The Telegraph.
He explained that the tariffs will cost his company $300,000 annually, given the lack of domestic alternatives to agriculture, with the exception of 1% of production in Hawaii.
US inflation data indicate that retail coffee prices rose 6.7% year-on-year in March, three times the overall inflation rate of 2.4%.
An agricultural economist at ING Bank, said that coffee, along with chocolate, are experiencing the highest price increases in the US consumer spending basket.
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