Reuters reported that the imposition of high tariffs on Brazilian coffee and other products by the U.S. government is a boon for local exporters.
The U.S. will impose a 50% tariff on certain Brazilian products starting August 6. This poses a challenge for bulk commodity traders and Brazilian coffee exporters, who need to find alternatives for the approximately 8 million bags of coffee sold annually to U.S. coffee processors.
China is Brazil's largest trading partner, while the U.S. is the main buyer of Brazilian beef and orange juice, among other products.
According to trade data compiled by industry lobbying group Cecafe, in June, Brazil exported 440,034 bags (each 60 kg) of coffee to the U.S., which is 7.87 times the amount exported to China that month (approximately 56,000 bags).
Brazil's annual supply can meet about one-third of U.S. coffee demand. The trade value for the 12 months up to June was $4.4 billion.