STiR coffee and tea magazine

STiR coffee and tea 23 Dethlefsen & Balk Inc. Chicago, USA Phone: +1(312)-628-8917 www.dethlefsen-balk.us NORTH AMERICA Tea | Coffee Accessories INTERNATIONAL Dethlefsen & Balk GmbH Hamburg, Germany Phone: +49-40-731073-0 www.dethlefsen-balk.de Tea | Coffee Confiserie | Accessories Exceptional TEA EXPERTISE since 1836 Premium Orthodox Teas Rare Varieties | Custom Blends Flavored Tea Specialties Tea Fruit Gummies | Premium Coffee Exclusive Accessories address "pernicious economic policies and prac- tices of our trading partners" that "undermine our ability to produce essential goods." Treasury Sec- retary Scott Bessent said recently during a speech at the Economic Club of New York that "access to cheap goods is not the essence of the Ameri- can Dream" and that international trade relations "that do not work for the American people must be reexamined." This places coffee in an unusual position. As Bill Murray, President of the National Coffee As- sociation, points out, "Every dollar of coffee-relat- ed imports generates $43 in value for the Ameri- can economy, and coffee supports 2.2 million US jobs." The question becomes: how do we recon- cile a policy designed to protect domestic indus- tries with a product that, by its nature, cannot be domestically produced at scale? Market Reactions: A Study in Contrasts The market response has been as varied as the industry itself—a patchwork of adaptation, con- cern, and occasional opportunity. As one Euro- pean trader noted in Reuters regarding Vietnam, "This is big. The tariff on Vietnam means $2,500 more per ton" for a US buyer. With robusta fu- tures trading around $5,390 per ton in early April, this represents a significant increase for import- ers who operate on thin margins in a highly com- petitive market. Coffee businesses across the US are respond- ing with characteristic creativity and resilience. Margaret Nyamumbo, who runs Kahawa 1893 and generates around $3 million in business annu- ally, told local news that she would certainly have to raise prices if the tariffs remain unchanged. However, some companies are choosing to ab- sorb costs to maintain customer loyalty. Andrew Sinclair, owner of Mad Lab Coffee in Los Angeles, With robusta futures trading around $5,390 per ton in early April, this represents a significant increase for importers who operate on thin margins in a highly competitive market. told KABC his prices will remain unchanged: "If you had to pay $9 for a cup of coffee, I probably wouldn't see you every day, and I like seeing people every day." Many coffee business owners and managers are hoping that the situation will resolve—i.e., the tariffs just go away and they can get on with their already overly-complex jobs. David Paparelli, CEO of M-Cultivo, said in an interview with STiR, "We have to level-set first on the tariff situation, and whether or not they will hold. And so at this moment, I think the main impact is psycho- logical: the markets, including the coffee market, are based on confidence. When you dilute that confidence, there will be fallout, usually in the form of increased price and increased interest rate."

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