RIO DE JANEIRO (Reuters) -Brazil's consumer coffee prices fell 1.01% in July, the first drop in 18 months, according to data from the country's Broad National Consumer Price Index (IPCA) published on Tuesday. 

During the preceding year and a half, coffee was one of the main drivers of inflation in Brazil, the world's second largest coffee market, according to the Brazilian Institute of Geography and Statistics (IBGE).

The retail price drop followed a decline in prices paid to farmers after the harvest of the 2025 crop, which is now in its final stages in Brazil.

The reported decline in consumer coffee prices in Brazil for the month of July follows volatility in international markets, driven by issues such as the decision by U.S. President Donald Trump to impose a 50% tariff on Brazilian goods. 

While products such as orange juice were exempt from the measures, others including coffee, eggs and beef were not. 

Last week, coffee futures in New York rose 8% as investors grew concerned that the tariffs could hinder trade between the world's largest coffee consumer, the United States, and the globe's biggest producer and exporter, Brazil. 

It is too early to tell if Trump's decision to hike tariffs against Brazilian goods could lead to lower prices of staples including coffee, IBGE manager Fernando Goncalves told Reuters.     

"It could be an effect of increased supply, and it's not possible to say or confirm that it's related to the tariff hike. The tariff hike only began this month," he said.