Welcome to our latest edition of Market Watch! Andrew Blyth is here to provide you with the latest insight into the “C” market, how tariffs will impact coffee prices, and more as of May 2025.

2025 Market Volatility

Coffee futures as measured by the NY “C” market continue to experience notable fluctuations in 2025, supported by weather-related supply concerns and global market volatility. Currently, we are trading around a $3.7500 basis for the current spot month July ’25 “C”. As we’ve previously written, the arabica coffee market made 19 consecutive all-time highs in 2025, bringing the baseline “C” market to a peak of $4.4085 on Feb 13th and shocking the coffee chain with a market level that was previously thought to be improbable, barring a catastrophic weather event.

Since initially reaching the $4.00 threshold in early February, the market has begun to show some comfortability—or, dare I say, stability—at this extreme price. Its desire to hover at these levels has felt validated by three failed attempts to make a new all-time high: $4.2450 on Feb. 18th, $4.1855 on Mar. 4th, and $4.1890 on Apr. 28th. Conversely, in early April, the “C” market showed potential for a substantial correction to the downside, a move many felt was long overdue. For a moment on April 8th, the market traded down to $3.2520, offering a flutter of optimism to the buy-side of the physical trade—the roasters. However, just twelve trading days later, we were back to $4.00 and charging towards a new high. Thankfully, we didn’t get there…

Where will the market go next?

This level of volatility is unheard of. Other markets have an extensive history of big swings and fast-changing values, but to long-term participants in the coffee market, this is a new world. Like many markets these days, the influence and buying power from the growing pool of speculative traders is powerful and deep. Speculators have the power to quickly push markets to the extreme, creating high volatility, wide daily trading ranges, and fundamental uncertainty.

To that point, we’re approaching the start of frost season in Brazil. Regular “C” market watchers know this is a historically concerning time, as Brazil’s weather is the #1 driver of coffee fundamentals. If we get through this roughly two-month period with uneventful forecasts, the market could find itself with positive news that would pressure the market lower. Alternatively, we could get a cold weather scare that fuels another spike to the upside, but only time will tell.

While we track and trade this market minute by minute at RNY and wait for more traditional or logical behavior, we simultaneously work on making sure we maintain available inventory of high quality coffee from our strong network of suppliers to offer to our roaster clients. Maintaining strong inventory of fresh coffee from reliable suppliers is paramount to keeping coffee businesses moving forward in the U.S.

Tariffs & Coffee Prices

Along with a fluctuating market, the coffee industry (like many others) faces a new hurdle: tariffs. On April 2nd, The Trump Administration rolled out sweeping tariffs on imports from most countries. These tariffs were broken into two categories: a “Universal” 10% tariff on all imports and a more targeted list of “Reciprocal” tariffs, ranging from 10%–125% depending on the country of origin.

A few days later on April 9th, the White House enacted a 90-day pause on the “Reciprocal” tariff plan, leaving the baseline “Universal” 10% tariff in place for all imports, from all countries, on any product that was shipped after April 5th. Some industries have exceptions, but coffee has yet to be one. The only coffee-producing country excluded from the list is Mexico; Mexican coffee still falls under the USMCA trade agreement that remains in place for now.

The Impact of Coffee Tariffs

As of May 19th, the next key date to focus on is July 8th, when the 90-day pause on “Reciprocal” tariffs expires. Coffee-producing countries like India, Indonesia, Vietnam and others could experience much higher tariff percentages.

While we wait to see what’s next, these 10% tariffs are part of our new reality. Payments are happening here daily, and we’re beginning to feel the direct impact on our industry. When Royal New York receives a tariff bill, we must pay to release our freight and then apply the cost, in full, to the lot associated with that specific tariff invoice. Tariff impact can and will range from $0.30 up to $0.60+ per lb., depending on the value of the coffee. While passing that expense to our customers feels counterintuitive to our customer service-focused ethos, there is unfortunately no other option; these tariffs are well beyond the margin typically made by coffee importers, and this added expense will need to be passed down to coffee consumers.

Working through Coffee Tariffs & a High “C” Market

So, where does this leave us: the buyers, sellers, cuppers, roasters, and drinkers of physical coffee? Well, it leaves us feeling uncertain about the future, confused about how to build and rebuild pricing models for our valued customers, and anxious that our customers won’t understand yet another price increase.

While these are not easy conversations to have, neither were those about COVID-19 shutdowns & staffing challenges, rapid interest rate hikes, and strained global logistics, but our buoyant industry fought through it all, as we will through this high “C” market, import tariffs, and overall increased cost of goods. Speaking anecdotally of pricing conversations with many roaster clients, there seems to be an evolving theme of resiliency.

Roasters are raising prices in all sales lanes; wholesale, retail bags and cups, ECOM, D2C, and distributor sales. While it’s a substantial challenge, consumers need to pay the new “real” price of coffee and potentially make consumption decisions based on what they value from a coffee experience. Of course, as providers of the precious beans we will meet any changes in preference as best as we can. However, our greatest asset should remain the ability to communicate the hard work, pride, and passion that begins at origin and flows through every stage of the coffee supply chain.

To dig deeper into the market, tariffs, or any other coffee concern you may have, please reach out to us. If you have any questions, need advice, or want to discuss strategies moving forward, we have the tools and experience to help manage steady supply and pricing in this challenging market.

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