The prevailing uncertainty over the US tariffs on Brazilian coffee has started worrying Indian exporters. They fear that Brazil, which has started looking for alternative markets, will divert its coffee meant for US to the European markets, which is the major destination for Indian exports.
Brazil, the largest producer of coffees, is the largest exporter to the US.
“We may face competition from Brazil in Europe,” said Ramesh Rajah, President, Coffee Exporters Association. Countries in Central America, which produce more competing products with Brazil in arabicas will first feel the pinch.
“We do not produce much coffee which directly competes with Brazil, that is mainly the unwashed arabicas. We are selling mostly washed Arabicas. But, you know there will be pressure on consumers. I mean the industry in Europe will try and use more of Brazilian produce, because it is much lower in price,” he said.
Pressure on robusta prices
“Brazil has become a very big robusta producer, which many people don’t think of. So Brazil will also affect the robusta market. While people look at Brazil from the arabica side, I am more concerned about the robusta side. There is a lot of Brazilian robusta which was going to US will start coming to Europe. Robusta could come under tremendous pricing pressure from Brazil also in the European market because they are of lower quality. But still when they start offering coffee at such low prices, people put pricing pressure on our Robusta,” Rajah said.
Indian robustas command a significant premium in the world market over the London terminal prices. “We may see increase in competition from the Brazilian coffee in the European market if the tariff issue is not resolved,” said Pramod Somiah, a curer in Kodagu.
Coffee prices have rallied over the past couple of years on supply issues. “The coffee industry in Europe is under tremendous pressure from consumers not to raise prices. So they are also under pricing pressure. So pricing is now becoming an important factor in selling coffee. The Indian coffee is going to come under tremendous price pressure unless (US President Donald) Trump does something, and we also bring down the price a little bit, we start to lose a lot in the European market” Rajah said.
Brazil expanding robusta output
Brazil, the largest producer of arabicas, is also catching up with the production of robustas. A recent report by Rabobank saidt Brazil is rapidly expanding its robusta coffee production, aiming to surpass Vietnam as the largest producer. Brazil’s robusta output has steadily grown in recent years, and is estimated to reach 24.7 million 60-kg bags in 2025, as per Rabobank’s projection, up from 19 million bags in 2020.
The US, the world’s top coffee consumer, imports 99 per cent of its requirement, and exporters have warned that the new tariffs could increase the cost for consumers and add to the domestic inflation. The US coffee industry has mounted pressure to remove coffee from the list of tariff.
Published on October 8, 2025