Coffee: Abics says Brazilian soluble coffee is fundamental for the US roasting industry.

The Brazilian Soluble Coffee Industry Association (Abics), represented by the contracted firm BMJ Consultores Associados, participated this week, Monday (6) and Tuesday (7), in Washington, USA, along with representatives from various sectors of the national economy, in the public hearings of the Office of the United States Trade Representative (USTR) on the US proposal to impose a 25% surcharge on products exported by Brazil, including soluble coffee. In its participation, the entity explained that the product is a fundamental input for various sectors of the US economy, including ready-to-drink beverages, bakery products, confectionery, dairy products and institutional food services. With studies that point to an annual growth of 5.6% between 2025 and 2030 in the US market for ready-to-drink coffee, Abics highlighted the need for a stable and accessible supply of Brazilian soluble coffee, an essential input for this product in the US market. The association added that large American food and beverage companies, including those that account for more than 20% of domestic retail coffee sales and more than 10% of total coffee consumption, also depend on a stable supply of instant coffee to maintain their operations and pricing strategies. In this context, the entity reinforced that Brazil plays an indispensable role in the United States supply chain, having accounted for 22% of US instant coffee imports – totaling 15,500 metric tons – mainly in the form of bulk extracts, concentrates, and granules. Abics also recalled that Brazilian instant coffee offers unique solubility profiles, blends of specific geographic origin, and internationally recognized quality certifications that cannot be effectively replicated by other suppliers. Another point raised was that this supply chain directly affects American consumers, since 11% of the local population consumes instant coffee daily, at a cost of only US$0.06 to US$0.07 per cup, especially in families concerned about budget issues. Thus, the entity argued that an additional 25% tariff (under Section 301) would raise prices, squeeze company margins, and disproportionately burden families that depend on affordable coffee for consumption. “Furthermore, this supply cannot be easily replaced. The US instant coffee import market is highly concentrated: Mexico and Brazil account for almost 60% of total imports, with Mexican prices being about 1.5 times higher than Brazilian prices,” explains Fabio Sato, Director of Institutional Relations at Abics, who was present at the hearing, adding that, “with limited surplus capacity in Colombia, Vietnam, and Indonesia, alternative suppliers cannot readily fill this gap.” He points out that, equally important, is the fact that Brazilian instant coffee adheres to rigorous quality standards from ABICS (Brazilian Association of Coffee Industries), including the classifications “Classic,” “Premium,” “Excellence,” and “100% Arabica,” and that the implementation of additional tariffs would cause immediate shortages, higher costs, lower quality, and reduced competitiveness throughout the US market, harming manufacturers, foodservice operators, and consumers. “Most of the economic value of this trade is generated in the United States. Brazilian instant coffee enters almost entirely in bulk, while blending, packaging, marketing, and distribution occur on American soil. Therefore, a tariff on this product would not penalize a finished foreign good, but would increase costs for domestic manufacturers and weaken the competitiveness of instant coffee products manufactured in the US,” Sato analyzes. According to the director of Abics, the logistical implications are also significant, with more than 81% of US soluble coffee imports entering through Texas, New York, and Louisiana, while Brazilian shipments are concentrated in New Orleans, New York, Charleston, and Los Angeles. “A sharp drop in Brazilian supply would affect important logistics hubs on the Gulf Coast and in the Northeast, generating shortages and jeopardizing industrial operations,” he states. Furthermore, Abics representatives emphasized that tariffs on soluble coffee would be neither practical nor effective in promoting the objectives of the USTR investigation, recalling that the coffee trade operates within a transparent and market-oriented agricultural system, distinct from the issues of digital commerce, intellectual property, the environment, and payment practices that are under analysis. The organization also warned that previous tariff increases have demonstrated that sudden cost shocks reduce import volumes, disrupt supply chains, and rapidly raise consumer prices. “Given the reduced margins of US food and beverage producers, these costs would likely be passed on to consumers, triggering a surge in inflation. For all these reasons, we requested that the USTR exclude code HTS 2101.11.21, which refers to Brazilian soluble coffee, from any additional Section 301 tariffs,” reports Sato. Meanwhile, the Director of Government Relations and International Trade at BMJ, José Pimenta, reports that, in addition to Abics, the defense of Brazilian soluble coffee was also made by the Brazilian Coffee Exporters Council (Cecafé) and the US counterpart, the National Coffee Association (NCA), resulting in 15 minutes of defense during the hearing. “The three presentations were very much in dialogue with each other, and an important point is that none of the entities were questioned; there was no contestation in any of the statements defending Brazilian soluble coffee, which gives us hope that the product will not be subject to the 25% tax, entering an exemption list, just like other types of coffee from Brazil,” he reports. Pimenta adds that, in the part of the hearing open to questions from the American investigators, the questions focused on the more specific issue of the eventual tariff impact on the US coffee chain as a whole, especially on manufacturing. “This was positive, as we were able to reinforce the entire economic and social impact that the addition of 25% tariffs to Brazilian soluble coffee will generate in the American economy and in the pockets of its consumers,” concludes the director of the BMJ.

This text was translated by machine from Brazilian Portuguese.