What is driving the price of coffee?
A combination of rising global consumption and weather events have pushed coffee prices up. Tariffs could hit next. How many price hikes are Americans willing to stomach for their morning coffee? The coffee market of 2025 sits at a critical point. Coffee stocks have dropped, but global consumption continues to rise, especially for specialty coffees. Supply chains face serious pressure from labor shortages, logistics problems, and climate change impacts on growing regions.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.So, why is coffee so expensive? It’s not just about supply and demand. Climate change is making coffee cultivation increasingly difficult, while new EU regulations will soon require proof that beans are not linked to deforestation—adding more pressure on producers.However, Starbucks is a holdout for now. The company said on its July earnings call that because of its buying practices, “coffee tariff impacts lag the market with year over year coffee cost increases expected to peak in the 2026,” executives said.
Is there a shortage of coffee in 2025?
Severe droughts and erratic rainfall in Brazil and Vietnam have triggered a supply crunch, while weather unpredictability has destabilised entire supply chains, both of which continue to pressure the coffee sector in 2025. Coffee leaf rust and the coffee borer beetle are two major threats, with coffee leaf rust alone reducing yields by up to 30% in some areas. It is estimated that climate change will reduce the area suitable for growing arabica coffee by 20% and robusta coffee by 9% by the year 2050.The Perfect Storm: Demand and Climate Simultaneously, climate change has reduced arabica yields worldwide, forcing companies to turn to robusta to meet their supply needs. As robusta thrives in hotter, more humid climates, it’s become an essential player in ensuring coffee’s future amid environmental challenges.So how will climate change impact coffee? A recent study published on PLOS One predicts an overall decline in the world’s suitable growing land for arabica coffee by 2050.Factors Contributing To Global Coffee Shortage The global coffee shortage is a result of several interwoven factors. For instance, growing coffee is sensitive to climatic conditions. High temperatures, varied rainfalls, and extreme conditions like drought have significantly impacted coffee-producing regions.Production is predicted to increase over the next three years, easing concerns for farmers and investors and promising rapid price drops of Arabica and Robusta coffee beans. If this trend continues, it could result in a return of more products to the shelves and lower prices for consumers.
What is the coffee market status?
India Coffee Market was valued at USD 478 Million in 2022 and is expected to reach USD 1,227. Million by 2032 at a CAGR of 9. Robusta coffee bad – that’s a myth However, it is important to stress that Robusta coffee has its own unique characteristics and flavor profiles that are appreciated by many people around the world. For some coffee lovers, Robusta coffee may even be preferred due to its bold flavor and higher caffeine content.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.While Robusta coffee has many advantages, there are some disadvantages to consider as well. Robusta beans have higher acidity than Arabica beans, which some people find to be unpleasant. Additionally, it often has a bitter taste that can be off-putting to some coffee drinkers.The future of Robusta coffee Robusta prices and demand will most likely continue to remain high as producing countries and importing roasters alike look to mitigate costs and climate change with Arabica alternatives.Key statistics and facts include a 25% increase in Arabica coffee prices since the start of 2025, Brazil and Vietnam accounting for 56% of global coffee supply, and a projected 12. Brazil’s Arabica production.
Why is the price of coffee falling?
Coffee Prices Drop as Supply Recovers After Climate Setbacks. After facing low harvests and high prices in the spring of 2025, coffee prices are dramatically decreasing. As a result, ripples are being seen throughout the global supply chain following a period of unpredictable crop yields and unstable consumer prices. Brazil accounts for approximately 30% of global coffee exports. Country that produces the most Robusta coffee is Vietnam.Coffee’s Economic Impact in Uganda Coffee remains Uganda’s top-earning export crop. It is also nearly 20% of the country’s total export revenue.He added that the recent drop was caused by major coffee-producing countries like Brazil and Venezuela re-entering the market after recovering from past production setbacks. These countries had previously given Uganda a chance to dominate the market, but their return has increased supply and driven prices down.
Will coffee prices go up?
Analysts agree that coffee prices will likely stay high or rise further. A 2025 Reuters analysis noted global coffee prices hit multi-decade highs due to weather challenges in major production regions such as Brazil and Vietnam. Coffee Market Summary. The global coffee market size was estimated at USD 269. USD 369. CAGR of 5.Coffee future prices (KC1:COM) continue to surge in 2025, with both arabica and robusta reaching multi-year highs. The impact is being felt in the U. S.Today, global coffee shortages are becoming a pressing concern. This shortage has impacted farmers, traders, and coffee lovers worldwide. Moreover, this shortage has also raised other concerns such as coffee prices.Coffee also requires specific conditions to grow, which are threatened by climate change: by 2050, the areas available for coffee production could be half what they are today,[8] and this will disproportionately affect the arabica variety, the most popular globally.