Turkey has recently made a significant decision to eliminate import tariffs on raw coffee beans sourced from Least Developed Countries (LDCs). This move is expected to have a positive impact on the domestic coffee market in the coming months. The decision, which covers 49 countries classified as LDCs, including major coffee producers like Ethiopia and Yemen, aims to reduce the cost pressure on filter and espresso coffee.
According to official data, Turkey’s coffee imports exceeded $400 million in 2024. The elimination of tariffs on coffee imports from LDCs is seen as a relief in import costs. However, experts suggest that the actual effect on domestic coffee prices will depend on various factors beyond just the tax cut.
Ahmet Tiryakioglu, Chair of the Cereals, Pulses, Oil Seeds, and Products Sector Board at the Turkish Exporters Assembly, emphasized that while the tariff removal could lower import costs, retail coffee prices are still influenced by global supply-demand dynamics and broader economic factors. The pass-on of cost reduction to consumers will be determined by importers’ pricing strategies, domestic production costs, and fluctuations in international coffee prices.
Sertac Yalcin, CEO of Arabica Coffee House, highlighted that despite the direct benefit of zero tariffs on procurement costs, the final retail prices are not solely dependent on this factor. He mentioned that coffee prices have been volatile, with futures trading at high levels due to supply disruptions in major coffee-producing countries like Brazil and Vietnam.
The recent surge in coffee prices has been primarily driven by weather-related challenges and logistical constraints in Brazil and Vietnam since 2024. These disruptions have led to a decrease in global coffee output, tightening supply and causing price hikes. As a result, even with the elimination of import tariffs on coffee from LDCs, immediate price drops are unlikely, and the impact on retail prices will be influenced by ongoing market conditions.
Experts suggest that while the tariff cut may help stabilize prices and slow down further increases, the global coffee market remains volatile. The decision by Turkey to reduce tariffs on coffee imports from LDCs reflects a broader effort to address price pressures and ensure a more sustainable coffee market in the country.
