Tariff dispute raises competition, squeezes margins in Brazil’s fruit market

The implementation of 50% tariffs by the United States on various Brazilian products, including those from the agribusiness sector, has raised concerns about an imminent increase in competition in Brazil’s domestic market for fruits, vegetables, and greens. Experts warn that this could lead to price reductions for consumers and shrinking profit margins for producers.

According to Valeska Ciré, Brazil representative of the International Fresh Produce Association (IFPA), the sector is “monitoring the situation and hoping for dialogue.” While efforts are underway to explore new markets, reallocating containers originally destined for the U.S. is a complex process, and the primary concern is the immediate financial loss for producers.

“Increased supply can lead to more competition and lower prices, which will penalize producers,” said Ciré during the Brazil Conference & Expo, held this Wednesday (August 6) and Thursday (August 7) in São Paulo. IFPA has 3,000 members worldwide, including 160 companies in Brazil ranging from small to large producers of mangoes, grapes, melons, strawberries, and apples. All will be impacted, she said.

Of the US$1.3 billion exported by Agrícola Famosa in 2024, the U.S. accounted for 12%, or about US$140 million. Europe is the company’s primary destination, accounting for 70% of its production. Still, the impact of the tariff hike is “very concerning,” said Luiz Roberto Barcelos, co-founder of the company. “It’s a significant volume — prices will inevitably drop.”

Barcelos believes that U.S. importers are sacrificing part of their margins and passing the cost on to consumers, while some Brazilian exporters are also willing to absorb a margin hit.

Lower profits and rising prices in the U.S. will likely reduce consumption and encourage fruit imports from other countries, such as Ecuador and Peru, he said. If the tariffs remain in place, domestic production will be reduced. “The ones who’ll pay the price are Brazilian producers, U.S. importers, and consumers.”

Check below the main destinations of Brazilian fruit exports in the first half of 2025. The chart was created using DataLiner data:

Top 10 Destinations for Brazilian Fruits – Jan 2022 to June 2025 – TEU

Source: DataLiner (Click here to request a demo)

Seeking new markets

Barcelos added that opening new markets is a long-term solution. “It took us seven years to gain access to China for melons and four years for grapes. New markets can be opened, but none will be established in less than two years. That won’t help the mangoes hanging on the trees ready to be picked today.”

Valeska Ciré of IFPA advocates for campaigns to increase fruit and vegetable consumption in Brazil, which currently falls short of the amount recommended by the World Health Organization (WHO) by one-third. “A higher level of domestic demand would create a sizable local market to absorb the surplus.”

Grupo Doce Mel, a producer and distributor of fruits, vegetables, and greens (FFV), foresees indirect impacts on its business. While it doesn’t export directly to the U.S., many of its suppliers do. Co-director Roberto Junior estimates that much of what was supposed to be exported will now stay in Brazil.

“It’s necessary to improve the domestic market and boost consumption immediately — through fruit promotions, for example,” he said.

Even companies not directly involved in fruit production are feeling the ripple effects of the U.S. tariff. Paripassu, a company that inspects and certifies FFV products, fears the consequences for its clients. Of its 5,500 clients, about 2,000 are producers of fruits, vegetables, and greens.

Although many of them do not export to the U.S., a surge of these products into the domestic market will still have an impact.

“This will disrupt demand and require a market reorganization,” said Heidy Milan, Paripassu’s Quality and Certifications Coordinator.

She warned that many clients will lack the cash flow to adapt to the shift. “Some may not survive, which would directly affect our business, including potential contract cancellations.”

A conflicting decision

Cathy Burns, global CEO of the IFPA, stated that she supports exempting fruits, vegetables, flowers, and greens from the 50% tariff. She described the measure as inconsistent with the U.S. government’s “Make America Healthy Again” initiative, which aims to combat chronic disease.

“You can’t be healthy without eating fruits and vegetables,” said Burns at the Brazil Conference & Expo 2025, a trade fair for the FFV sector held in São Paulo.

Burns called for dialogue between countries as the best path forward, emphasizing that many important U.S. imports come from Brazil — though she also urged Brazil to increase its focus on other export destinations.

“Brazil already exports to countries other than the U.S. I believe 56% of Brazilian fruit exports go to Europe, so that’s also a very important market,” she said.

Source: Globo Rural

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