Global Coffee Prices Are Rising

March 04, 2025

Enjoy your morning coffee while you can, says Bloomberg, and here's why:

Javier Blas, coffee commodities columnist at Bloomberg Opinion, predicts that coffee prices are about to go up! We concede, they already have!

Like other roasters, we have been watching the commodity market prices of our product extremely closely. Coffee is traded as a commodity, with Arabica traded out of the New York Stock Exchange and Robusta in the London Stock Exchange. The trading price of coffee has risen to record highs in February and has relatively maintained this stature.

Coined the 'coffee inflation wave of 2025', this is the first coffee inflation of all time, with the highest prices ever recorded!

Raw coffee is a complex product. Two commercial botanical species, Coffea Arabica and Coffea Canephora, grow in equatorial regions at high altitudes. Global production and coffee prices are affected by drought, disease, and politics. World coffee consumption is steadily increasing, while coffee production is becoming more challenging. Politics is also in a time of change.

CLIMATE CHANGE

As coffee is a crop, it is always affected by weather conditions. We hear more often about landslides, frosts, and droughts in coffee-producing regions - uncontrollable factors that affect coffee trees and their coffee cherry yields. Let's not forget the communities producing coffee seeds for their livelihoods. Climate change is now a major factor in coffee production globally.

Brazil and Vietnam are the world's largest producers of coffee. Both have had poor weather and have had low crops. Brazil, in particular, has been affected by frosts, extreme heat, droughts, and erratic rainfall over the last 4 years.

Higher temperatures mean that the flowers on the coffee tree don’t develop into coffee cherries. The cherries produce the seeds known to us as coffee beans. If Brazil doesn’t deliver a good harvest in 2025, it is reported that global stockpiles may be at their lowest level in decades. Supply concerns in these key growing areas are shaking up the market more than ever before.

Climate change is making coffee production more vulnerable, and demand is likely to continue to outstrip supply.

DEMAND

Prices have risen, as has demand. The market is currently volatile, leading to panic buying and selling. In stock market trading terms, this is described as speculative buying of 'coffee futures' by hedge funds and large coffee companies. All of which drive up future prices and have repercussions on ‘spot’ or current prices.

The International Coffee Exchange (ICE) lists the coffee futures contracts and the price/premium to be delivered at a future date. If the coffee is not delivered, 'differentials' affect the final price.Future pricing is affecting small roasters right now, and the dynamics of coffee pricing in the C market may have changed forever.

Supply chain issues in Brazil, which is responsible for as much as 40% of the global coffee supply, have significantly influenced the cost price of green (raw) coffee to buyers like us. At the time of writing, the green coffee market price is up 65.4% compared to 6 months prior (397.23 USd/lbs vs 239.97 USd/lbs).

In short, demand is affecting pricing as much as politics is affecting the market, and supply is compounded by the uncertainties and the effects of climate change.

POLITICS

Colombia is the world's third largest coffee producer, and the mere threat of tariffs from the new US administration is enough to scare the commodities market further. We have witnessed the supply of some origins we source from Central and South America increasing by over a third in just a few months. Reports from coffee-producing countries in South and Central America change daily, as do prices.

HIGHEST PRICES ON RECORD

The all-time highest price recorded dates back to 1977, and that record has just been smashed! We now have the highest prices on record for our cup of coffee (433.37 USd/lbs). For context, the green coffee market price at the same point last year was 127% lower at 190.85 USd/lbs.

Image: World Coffee Organisation - The world coffee statistics database.

Perhaps this is what we should have been paying all along for our coveted cup of coffee. The unfair distribution of wealth in the world is a result of many factors, including colonialism in coffee-producing lands. That’s a topic for another blog post!

HOW WILL THIS IMPACT US?

Dear Green has spent considerable time securing high-quality coffee for 2025/26 that aligns with our values for social, environmental, and economic sustainability, ensuring we can provide a product that is aligned with our ideals and allows us to continue to showcase specialty coffee. The recent events have significantly impacted the specialty coffee industry.

At Dear Green, we will continue to be transparent and share information with all of our customers. We will price our coffee to allow us to continue as a sustainable, independent business. We will continue to support the buying relationships we have had in place with our suppliers, some going as far back as 2012. Our support of our community is our driving force. Thanks for reading this far and for sticking with us.

The recent events have significantly impacted the specialty coffee industry.As Javier of Bloomberg says, this is the tipping point! Thanks for reading this far and for sticking with us!

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