LONDON (Reuters) – World cocoa, coffee and sugar prices slid again on Friday as markets remained rattled by U.S. president Donald Trump’s sweeping tariffs, especially after China retaliated with its own levies on U.S. imports.
Trump on Wednesday imposed a 10% tariff on most U.S. imports and much higher levies of more than 50% on some countries, prompting a world-wide sell-off in stock markets as nations from Canada to China ready retaliation.
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“Following this ‘liberation’, many trade flows from the most affected producers will now enter a labyrinth in order to find demand in other countries,” said Rabobank in a report that warned the new demand will come ‘at an efficiency cost’.
The bank also said that as ‘retaliation day’ looms, U.S. consumers of coffee and chocolate should expect more expensive products as top cocoa producer Ivory Coast faces a 21% tariff while No. 2 coffee producer Vietnam faces a ‘humbling’ 46% levy.
At 1559 GMT, London cocoa futures traded on the ICE exchange, seen as a global price benchmark, traded down 3.6% to 6,445 pounds per metric ton, having lost 1.5% on Thursday, while New York cocoa plunged 7.9% to $8,555 a ton.
Aside from consuming the most chocolate, the U.S. is also the world’s top importer of processed cocoa products like butter from the European Union, Malaysia and Indonesia, which now face tariffs of 20%, 24% and 32%, respectively.
While tariffs could hurt U.S. chocolate demand, dealers noted that losses in cocoa are somewhat limited by supply concerns, with top producer Ivory Coast expected to record its worst mid-crop in a decade.
Arabica coffee futures, by contrast, slid 3.9% to $3.7030 per lb, having lost 1% on Thursday, while robusta coffee fell 3.9% to $5,183 a ton.
Dealers said worries over demand are growing in coffee and that the Trump tariffs come at a time when roasters are already facing pushback in their bid to pass on near-record prices to retail stores in the world’s largest coffee consuming nation.
“If applied, the new (46%) tariffs could spell the end of Vietnam coffee in the U.S. as it would create significant price gaps with competing robusta origins – a massive 36-percentage-point difference (~$1,944/ton) compared with Brazil,” said a dealer.
In other soft commodities traded, raw sugar fell 1.6% to 18.8 cents per lb, having closed down 2.5% on Thursday, while white sugar fell 1.3% at $536.50 a ton, having lost 1.6% in the prior session.
(Reporting by May Angel; editing by David Evans and Louise Heavens)
