Coffee Prices Remain High Despite Tariff Relief, Illycaffé Predicts Further Increases
Coffee lovers aren’t likely to see immediate price relief despite recent U.S. tariff reductions on brazilian coffee imports, according to Cristina Scocchia, head of Italian coffee roaster illycaffé SpA. In a Bloomberg interview, Scocchia stated the company anticipates price increases beginning in January.
Illycaffé, known for its espresso sold in signature silver-red cans, has already implemented two price increases this year. This follows a record high for Arabica coffee bean prices in October, driven by a combination of U.S. tariffs on Brazilian imports and a globally weaker harvest.
While President Donald Trump has as approved tariff relief for selected commodities from Brazil, including coffee, prices have only decreased marginally and remain near record levels.
“There is a limit to which a company can absorb the price of green coffee, which is so unhealthily high,” Scocchia explained, referencing the significant rise in unroasted bean costs. “we will increase the price in all countries and in all distribution channels,” she confirmed,outlining the company’s plans for January.
Industry analysts predict other roasters will follow suit, as consumer prices haven’t fully reflected the increased commodity costs. Carlos Mera, head of agricultural commodities market research at Rabobank, noted that price increases on grocery store shelves typically lag behind commodity cost changes by months, even up to a year, and expects further growth in the coming months.
Illycaffé forecasts unroasted bean prices will stabilize between USD 2.80 and 3.00 per pound (128 to 138 CZK per kilogram) in the second half of next year – still above the five-year average. “We were hoping for a much more dramatic decline,” Scocchia said in a telephone interview.
Scocchia described the situation facing the coffee industry as “really very challenging,” attributing the high prices to market speculation rather than genuine supply shortages.
Despite the challenging environment, illycaffé maintained its sourcing strategy from Brazil, due to unique blends requiring coffee from the country. The company also plans to establish a manufacturing partnership in the U.S., where it currently generates 20 percent of its total turnover.
Illycaffé has worked to mitigate the impact on consumers by absorbing a significant portion of the increased costs within its margins, a strategy that has contributed to boosted sales. Demand for coffee has remained stable despite the higher prices, and the company anticipates continued single-digit market growth.
