Trump tariffs add volatility to Brazilian agricultural commodities in July

The tightening of tariff policy by U.S. President Donald Trump has added a layer of volatility to agricultural commodity trading on U.S. exchanges in July, particularly for goods in which Brazil is a major supplier to the United States.

Such was the case with frozen concentrated orange juice (FCOJ). In July, the average price of second-position contracts for the commodity on the New York exchange was 9.11% higher year-on-year, reaching $2.7974 per pound, according to Valor Data.

Since July 9, when Trump announced a 50% tariff on Brazilian goods, the orange juice market has been thrown into question. The U.S. is Brazil’s largest orange juice buyer, accounting for 70% of its exports.

Here is a historical overview of Brazilian orange juice exports to the United States starting from January 2022. The chart was prepared using DataLiner data:

Brazilian Orange Juice Exports to the United States – Jan 2022 to May 2025 – TEU

Source: DataLiner (Click here to request a demo)

According to Andres Padilla, senior analyst at Rabobank, the announcement turned the market on its head. Until then, prices had been trending downward due to above-average rainfall in Brazil’s citrus-producing regions.

If implemented, the tariffs would force Brazil to seek new buyers, such as Europe and China. However, Padilla noted that those markets would not be able to absorb the full volume previously destined for the U.S.

On Wednesday, July 30, Trump added orange juice to the list of tariff-exempt products. As a result, second-position contracts (for November delivery) fell by 9% to $2.467 per pound yesterday.

In this context, Padilla believes the market will return to focusing on supply and demand fundamentals. “With the start of the harvest [in Brazil], the market should once again concentrate on weather patterns and fruit quality, along with demand data from key consumer markets,” he said.

Coffee, by contrast, was affected by Trump’s tariff package, but its price fell in July compared to the previous year due to favorable weather conditions. With Brazil’s harvest well underway and favorable weather in coffee-growing regions, the average value of second-position arabica contracts dropped 12.04%, to $2.9251 per pound.

Trump’s tariff announcement had a limited impact on the coffee market, said Haroldo Bonfá, director at Pharos Consultoria. According to him, traders were betting that coffee would be exempt from the new duties—especially after U.S. Commerce Secretary Howard Lutnick publicly acknowledged this possibility. Now, with no tariff relief, the market is clinging to the increase in supply.

“We’re in the thick of the arabica harvest in Brazil, with 85% already completed, and the conilon harvest is wrapping up. It’s also worth noting that coffee came through July’s cold snaps virtually unscathed,” he said.

Signs of declining cocoa demand pushed down prices in New York. The drop in July reached 13.51%, with an average of $7,789 per tonne.

In Europe, the world’s largest cocoa consumer, grindings fell 7.2% in the second quarter, to 331,700 tonnes, according to the European Cocoa Association. Analysts had expected a 5% decline.

Also in New York, sugar rose 1.90% to $0.17 per pound, while cotton climbed 1.20% to $0.67 per pound.

Chicago Board of Trade

On the Chicago Board of Trade, grains posted losses across the board, with soybeans seeing the sharpest decline. In July, soybean prices fell 3.79%, averaging $10.09 per bushel.

The U.S.-China trade dispute was the primary driver of last month’s losses, said Ariel Nunes, analyst at Gran Center Commodities. Following an unprecedented exchange of retaliatory tariffs, the two countries agreed to “freeze” rates until August 12, but a long-term deal remains elusive.

“The latest USDA reports confirm that China is still far from resuming purchases of U.S. soybeans,” Nunes noted.

Favorable weather in the U.S., which is expected to boost corn yields, drove down prices for the grain. The average price of corn contracts dropped 1.98%, to $4.1278 per bushel. Wheat slipped 0.21%, with an average of $5.5476 per bushel.

Source: Globo Rural

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