The Impacts of US Tariffs, EUDR and Price Volatility on Producer Organisations and Social Lenders

In this blog, we revisit CSAF's recent webinar, which reflected on its newly published State of the Sector report. 

During the question-and-answer session, guests of the online event had the opportunity to ask panellists and members of CSAF questions regarding the topics discussed, including USAID cuts, EUDR impacts and price volatility trends.

How US tariffs will affect producers in West Africa, and which strategies can be used to mitigate these impacts

As a founding member of CSAF, Shared Interest was represented by Paul Sablich, Head of Lending, as a panellist. 

Regarding the the impact of US tariffs on West Africa, Paul said:

“What we have heard so far from buyers is that they plan to initially transfer these tariffs onto the final consumer. If that is fully possible or not: it is yet to be seen... because eventually, the market can react towards those higher prices and demand can shrink. 

"So then, the next potential step is that buyers are forced to return or renegotiate some of those prices paid to producers to acknowledge those tariffs. I believe this is going to impact farmers because they tend to be the so-called 'weakest link', with less capacity for negotiation - if you compare this to well-developed international buyers..."

With concern to the strategies which can be implemented to tackle these challenges, Paul said:

"The way to tackle this, for me, is by making the business more efficient.

“If processing and operational costs increase, the only way to face them is to become more efficient and to find other savings and improvements that can mitigate and deal with the situation ... because tomorrow, a new challenge will appear.

“Today is the US tariff, tomorrow, something else. The concept will be forever-changing and as CSAF members, with the support of field-building partners, we find ways to help producers to navigate these complexities.”

How US tariffs are pushing producers to alternative markets

Maria Raurell Carulla, Senior Director of Investments and Risk at MCE Social Capital, expanded on this point by sharing some trends she has observed within her own organisation's partner network. 

Maria said:

"What these businesses have been looking at is commercially opening markets [but] it takes a commercial effort to be able to start looking at other regions in the world, where things like the [Fairtrade] Premium can be preserved, so they are able to still pay farmers what they are supposed to, whilst covering costs. 

"But there are some regions that have started saying: ‘Whoever doesn’t want to sell to the US, sell to us instead' ... and that is where some of my companies are looking and engaging to be able to maintain that diversification [and] try to substitute part of that coffee or cacao flow towards other regions...”

The Impact of EUDR on Shifting Commercial Distribution

Andrea Zinn, Director of CSAF, affirmed the interesting trend in shifting distribution and asked panellists whether this pattern had also been observed as a reaction to the emerging European Deforestation Regulation (EUDR).

Andrea said:

"I know that some co-operatives, even though they themselves are not deforesting land, it is hard for them to make sure that they are compliant because of the demands in all of the data collection that it takes to comply with EUDR. So, are you also seeing a transition to regions such as Australia and the Middle East as a response to EUDR?"

In response, Maria said: 

“That is exactly the reason why I did not mention the EU. And that is also tagging to my previous statement, that I feel the world is shrinking for these companies. They need to find those other regions that, maybe, were not prominent - but they have strong demand to be able to further diversify and try to maintain a certain level of revenue to be able to continue paying for prices to the smaller farmers."

The outlook for the agri-sector from 2025 to 2026

To close the session, Andrea asked panellists their outlook for the rest of 2025 going into 2026. In addition, Andrea asked how the sector proposes to continue to attract capital when there are less support systems in place, a smaller pool of capital available to producers and increased risk.

Paul Sablich, Shared Interest Head of Lending, said:

"I started with the topic of prices, so I will address it from that perspective. Now, there is still quite high price volatility. It is very tangible. Especially for producer groups trading in commodities.

"We as lenders need to carefully monitor these movements. In coffee, we already have seen lower prices since March 2025 onwards - and the equation is not complex. If you purchase coffee from your farmers at high prices, but later fix it at lower prices to export it, then you make a loss. We do not know if the reducing tendency will continue or not."

"Therefore, we need to monitor and accompany producer groups in the second half of the year, whether the price goes up or down.

"We still need to see, in the second half of the year, the implementation of the EUDR. I believe compliance for several of our customers is advanced, but not for every producer group.

"We know it is not a one-time effort. It requires implementing adequate processes, introducing new business practices and instating traceability systems to facilitate reliable data collection in the longer-term, among other challenges."

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Click here to read CSAF's State of the Sector Report 2025.