Coffee lovers may soon face higher prices for their daily brew, as the cost of coffee beans has surged to an all-time high on international commodity markets. On Tuesday, the price of Arabica beans, which make up the majority of global coffee production, surpassed $3.44 per pound (0.45 kg), marking an increase of more than 80% this year. Meanwhile, the cost of Robusta beans reached a record high in September, further intensifying concerns for coffee drinkers.
Experts attribute the sharp rise in prices to a combination of factors, including adverse weather conditions that have affected the world’s two largest coffee producers, Brazil and Vietnam. Both countries have experienced extreme weather events, including droughts and heavy rainfall, which have significantly impacted their coffee crops. Traders are now predicting that these weather disruptions will lead to a reduction in global coffee supplies.
Vinh Nguyen, CEO of Tuan Loc Commodities, told the BBC that coffee brands are already considering price hikes for the new year. In recent years, large coffee roasters have been able to absorb rising raw material costs to maintain competitive prices for consumers. However, according to Nguyen, the situation has reached a tipping point.
“Brands like JDE Peet (which owns Douwe Egberts) and Nestlé have previously taken the hit from higher raw material prices,” Nguyen said. “But now they are almost at a tipping point. Many are contemplating a price increase in supermarkets in early 2025.”
At a recent investor event, David Rennie, head of coffee brands at Nestlé, confirmed that the coffee industry is facing significant challenges. He acknowledged that the company would need to adjust both its prices and product sizes to cope with rising costs. “We are not immune to the price of coffee, far from it,” Rennie said.
The record high for coffee prices was previously set in 1977, following an unusual snowfall that devastated Brazil’s coffee plantations. This time, concerns about Brazil’s 2025 crop are central to the price surge, as the country has faced its worst drought in 70 years, followed by heavy rains in October. These weather conditions have raised fears that the flowering coffee crops may fail.
Robusta beans, primarily produced in Vietnam, have also been affected by similar weather disruptions, leading to a reduction in supply. As the world’s second most traded commodity by volume, after crude oil, coffee’s popularity continues to rise globally, especially in China, where consumption has more than doubled in the last decade.
“Demand for coffee remains high, while inventories held by producers and roasters are reported to be low,” said Fernanda Okada, coffee pricing analyst at S&P Global Commodity Insights. “The upward trend in coffee prices is expected to persist for some time,” she added.
