SOFTS-Arabica coffee prices ease, focus on Brazil tariffs
NEW YORK, Aug 6 (Reuters) - Arabica coffee futures on ICE fell on Wednesday as traders assessed the potential fallout from a newly-imposed 50% U.S. tariff on imports from Brazil.
The United States, the world's largest coffee importer, has imposed a tariff on imports from the world's top coffee exporter, Brazil, effectively freezing trade between the two countries.
"Right now you have to pay the tariff and who knows, maybe tomorrow there will be no tariff. Why take it there (to the U.S.) now? So the market is frozen," one trader said.
Arabica coffee prices KCc1 settled down 5.3 cents, or 1.8%, at $2.934 per lb, after rising by about 5% during the first two sessions of this week.
The U.S. tariffs are seen as supportive for prices in the short term as traders scramble to redirect trade flows and get their hands on stock.
Brazil's Finance Minister Fernando Haddad said on Wednesday he would hold a call next week with U.S. Treasury Secretary Scott Bessent in a bid to normalise relations with Washington.
"It will be on Wednesday, and depending on how the talks go, it could advance to an in-person meeting," he told reporters.
Brazil's President Lula, however, told Reuters later on Wednesday that he saw no room for direct talks with Trump just yet.
Brazil is expected to boost exports to China and the European Union to help at least partially compensate for lost sales to the United States, which may need to seek additional supplies from Central America and Africa.
Brazil coffee exports fell 20% in July to 2.68 million bags, the government said on Wednesday.
Robusta coffee LRCc2 fell 0.6% to $3,340 a metric ton.
The strong pace of exports from top robusta producer Vietnam has helped to keep the market well supplied.
Sugar prices eased, while cocoa futures were mixed.
Raw sugar SBc1 settled down 0.08 cent, or 0.5%, at 16.01 cents per lb, while white sugar LSUc1 lost 0.3% at $462.10 a ton.
Brazil sugar exports in July fell 5% to 3.59 million tons.
London cocoa LCCc2 settled down 18 pounds, or 0.3%, to 5,410 pounds per ton, while New York cocoa CCc2 gained 1.1% to $7,837 a ton.
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