Why is coffee stock dropping?
After facing low harvests and high prices in the spring, coffee prices are dramatically decreasing. Ripples are being seen throughout the supply chain, following a period of unpredictable crop yields and unstable consumer prices. In summary, the current high coffee prices are the result of a complex interplay of environmental challenges, logistical issues, market dynamics, and currency fluctuations. These factors have combined to create a volatile market with prices at historic highs.Climate change is the real culprit behind this issue, and it is hitting major coffee-producing nations hard. Brazil, the world’s coffee giant, is responsible for 40% of the global supply.Over the next two decades, bad harvests could become the norm, wild arabica coffee could move from thriving to endangered, and the land available for coffee cultivation is expected to shrink by half or more.The demand for coffee is expected to continue to grow, making it an attractive investment for those looking for long-term growth opportunities.By 2050, experts predict that climate change could kill off the 2 main coffee varieties we drink daily while also jeopardising 60 per cent of the planet’s 124 wild coffee plants. The news will come as a shock to Australia’s 11 million daily coffee drinkers ahead of World Coffee Day on 1 October.
What is the future of the coffee crisis?
The global coffee market is experiencing unprecedented volatility in 2025. Arabica coffee prices have more than doubled in the past year, exceeding $4 per pound. This situation presents both challenges and opportunities for businesses and consumers. The global coffee industry is navigating an extended period of high market prices. Over the last two years, green coffee costs have almost doubled, reaching an all-time high of US $4. February 2025.As per the US Coffee Market size analysis conducted by the CMI Team, the US Coffee Market is expected to record a CAGR of 5. In 2025, the market size is projected to reach a valuation of USD 90. Billion. By 2034, the valuation is anticipated to reach USD 150. Billion.Driving coffee’s five-year growth trend, consumption of specialty coffee has increased by nearly 18% (consumed by 46% of American adults during the past day in January 2025, compared to 39% in 2020).Coffee prices have surged to levels not seen in years. In fact, Arabica coffee futures, which largely dictate global green coffee prices, rose over 70% in 2024, peaking above $4.
Is the coffee market growing or shrinking?
The Coffee Market Is Growing Rapidly The coffee market is expected to reach US$96. Out-of-home revenue – generated in restaurants and bars – will touch US$376. President Donald Trump has threatened a 50% tariff against Brazil, a major producer of green coffee beans. That could lead to higher coffee prices. Coffee prices are expected to rise if 50% tariffs on Brazil hold. The price of coffee has already increased due to droughts in Brazil and Vietnam.At a basic level, the price increase is a consequence of demand outstripping supply. Coffee consumption has grown globally over past decades and the industry is struggling to keep up.Experts say higher coffee prices are in part due to recent extreme weather and changes in temperature, which have caused some producers to experience lower yields.This shortage has impacted farmers, traders, and coffee lovers worldwide. Moreover, this shortage has also raised other concerns such as coffee prices. In 2024, global coffee prices surged by 147%, with premium Arabica beans reaching USD 3. USD 5,200 per metric ton.
Why is coffee so expensive in the USA?
The price hike is driven by a perfect storm of factors. Coffee is traded on global stock exchanges, and speculation has inflated prices without benefiting the farmers. Meanwhile, extreme weather in top-producing countries like Brazil, Colombia, and Vietnam has led to poor harvests. The Coffee Market Is Growing Rapidly The global coffee market is experiencing significant growth, driven by several key factors. The coffee market is expected to reach US$96.Climate Change and Crop Disruption Major coffee-producing countries such as Brazil and Vietnam have faced severe weather events, including historic droughts and erratic rainfall. These conditions have significantly reduced crop yields, pushing Arabica prices up by over 80% and Robusta by 92% year-on-year.Coffee forecast for 2025 and beyond For its coffee forecast for 2025, Citigroup raised its US coffee price estimate in November 2024 to $2. Looking further ahead, the bank expects prices to normalise to $2.Tariffs threaten to add more pressure to an industry already navigating a recent price surge fueled by droughts in countries like Brazil and Vietnam. As of June, the average price of a pound of ground roast coffee cost $8. Bureau of Labor Statistics.The coffee market has never been so volatile. Coffee prices are climbing due to a trifecta of climate factors, geopolitical turmoil, and tariffs. Your cup of coffee may only increase in price, as cafés have yet to feel the full effects of tariffs.
What is the heart of the crisis in the coffee industry today?
Climate Chaos: Mother Nature has not been kind to coffee growers lately. In Brazil, the world’s largest coffee producer, severe droughts followed by unexpected frosts have decimated crops. Farmers watched helplessly as their carefully tended plants withered under the scorching sun or succumbed to the icy grip of frost. Since these conditions all need to be present to make the rich beans we all want in our coffee, it is no surprise that only 2 out of our 50 states can grow coffee — California and Hawaii. Simply put, we do not have the climate to support growing coffee.Optimal coffee-growing conditions include cool to warm tropical climates, rich soils, and few pests or diseases. The world’s Coffee Belt spans the globe along the equator, with cultivation in North, Central, and South America; the Caribbean; Africa; the Middle East; and Asia.As of today, California, Hawai’i, and Puerto Rico are the only places in the greater United States where coffee may be commercially cultivated (though California does not have explicit regulations on the trade).Major coffee-growing regions like Brazil, Colombia, and Vietnam are primarily contributing to this shortage due to many reasons like extreme weather conditions, supply chain disruptions, and labor challenges. Another reason adding to this complexity is the Red Sea shipping crisis.
Will the price of coffee go up in 2025?
In 2025, weather disruptions have played a major role in pushing prices higher. Brazil — responsible for about one-third of the world’s coffee — has faced ongoing drought conditions, severely affecting both Arabica and Robusta coffee crops. We only use 100% arabica beans, so you can enjoy the delicious, high quality coffee these beans help create. Arabica can be elegant. It can be complex. It can have an interesting body and acidity that can be used and played with and blended into new, interesting tastes.While one isn’t necessarily better than the other, most people seem to prefer Arabica over Robusta because it tastes better. Arabica is smoother and sweeter while Robusta is infamous for its bitter and traditional coffee flavor.Ethiopian coffee is mainly Arabica coffee with a very small amount of Robusta being produced.Our coffee, our why Starbucks proudly sources 100% arabica coffee from more than 450,000 farmers in 30 markets along “The Coffee Belt” – in Latin America, Asia Pacific and Africa. Our buyers, based in Lausanne, Switzerland, scour the globe for the finest coffees, including our premium, single-origin Reserve selections.In 2023, about 80 percent of U. S. Latin America (valued at $4. Brazil (35 percent) and Colombia (27 percent).