As coffee prices swing wildly, consumers face a bitter brew. Arabica futures hit a record $4.40 per pound in February 2025 before crashing 51% by July, but experts warn price volatility isn’t over. Retail ground coffee hit $7 per pound this year, up from $4 in 2020. The International Coffee Organization says global prices doubled in two years, driven by supply chain snarls and climate shocks. Even as farmers grow more beans, roasters and retailers struggle to keep shelves stocked.
Arabica coffee futures swung from $4.40 highs to a 51% crash, with retail prices doubling to $7 as climate shocks and supply snarls empty shelves.
Global coffee production is set to hit 178.7 million bags in 2025/26, with Vietnam, Indonesia, and Ethiopia posting record harvests. But Brazil and Colombia, key Arabica producers, face shrinking output. The FAO reports smallholder farmers still produce 80% of the world’s coffee despite mounting climate pressures. The sustainability of these traditional Ethiopian agroforestry systems is crucial in preserving biodiversity and maintaining high-quality yields. Low global stockpiles of 22.8 million bags leave markets vulnerable to shocks. Vietnam’s rebound to 31 million bags, mostly robusta, hasn’t fixed shortages because shipping delays and export cuts still disrupt supply chains.
Coffee cultivation in volcanic soils provides essential nutrients for optimal growth, but climate chaos upended harvests. Droughts and frosts slashed Brazil’s 2024 crop, shrinking beans and lowering quality. Small farms, which grow 80% of the world’s coffee, can’t easily adapt to erratic weather. Even with high yields, regional disasters—like floods in Indonesia or heatwaves in Africa—keep total supplies tight.
Costs for farmers keep rising too. Fertilizer, fuel, and labor prices jumped, squeezing profits. Vietnam enhanced yields by spending more on crop inputs, but smaller growers often can’t afford upgrades. New EU deforestation regulations requiring proof of sustainable practices could add up to $0.20 per pound in certification costs, further squeezing small producers. Global inflation pushed roasters to charge more, even when harvests improve.
Demand isn’t slowing. The world will drink a record 169.4 million bags next year. China’s coffee craze grew 150% in a decade, shifting from tea to lattes. Arabica, preferred by cafes, faces sharper price hikes than robusta. Some buyers paused purchases as costs soared, yet stockpiles keep shrinking.
Trade policies add pressure. US tariffs on Brazilian beans could reroute exports, further straining supplies.
With climate risks rising and costs stubborn, the brew for coffee drinkers looks strong—and expensive—for years.
