Is coffee a good investment now?
It’s a $100+ billion industry, fueling economies, supply chains, and, of course, our morning routines. But lately, coffee has been making headlines for a different reason: its price has been skyrocketing. coffee futures have surged over 30% year-to-date, hovering near all-time highs. For most investors, commodities like coffee work best as a small part of a diversified portfolio, rather than a primary investment strategy. But if you’re fascinated by the global coffee market, its price swings, and the economics behind it, it’s definitely a space worth watching.You may already be aware but as we enter 2025, spot green coffee prices have surged to unprecedented levels. Several factors, including climate change, supply chain disruptions, and rising global demand, are driving this significant price increase.While the cost of coffee beans has been a significant driver of price increases, other ingredients, such as milk and sugar have also seen price hikes. The cost of milk increased 3. May 2024 and May 2025, while sugar and sugar alternatives are up 3.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.And it’s for this reason that at home coffee sales are projected to grow at a CAGR of 2. Statista), despite the average price of a cup of coffee increasing by 17% since 2022 (Lumina Intelligence).
Why is coffee trading so high?
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.Coffee shops are incredibly profitable thanks to their high profit margin and low cost of stock. With effective cost management and market expertise, there is a lot of potential for success.Changes in climate: Shifts in temperature and rainfall patterns can affect coffee growing regions, leading to altered growing conditions, increased pests and diseases, and reduction in yields. Rain at the wrong time of year as well as drought when the coffee trees need water can decimate that year’s crop.The spike in coffee prices in 2025 is more than just a temporary blip — it’s the result of a global supply chain under pressure from weather, politics, and financial markets. For coffee lovers, that means higher prices and greater awareness of the forces behind the scenes.Cost of climate change As with the cost of other global commodities, supply and demand are a large part of the equation. Getting caffeinated is likely to become an ever-costlier proposition because of rising temperatures, droughts and excessive rains striking Brazil and Vietnam, the world’s two biggest producers.
Is coffee in demand or supply?
Coffee demand grows stably every year, because there’s no alternative drink for coffee. Supply thus becomes the sole factor that affects short-term prices. Note: in the USDA’s biannual Coffee: World Markets and Trade report, marketing year for coffee producing countries mainly begins in October. Situated in South America, Brazil is the top producer of coffee. They produce 2,68 million metric tons of coffee on average every year. Brazil has also held onto its first-place position as the world’s largest coffee producer for over 150 years.Major coffee importing countries worldwide 2023 As the leading global coffee importer, the United States imported more than 2. U. S. Colombian coffee in 2022.Brazil. Brazil is the world’s largest coffee producer, responsible for about one-third of global production, according to the USDA Foreign Agricultural Service. In the 2024/2025 marketing year, Brazil is projected to produce 69.The total economic impact of the coffee industry in the United States in 2022 was $343. The coffee industry is responsible for more than 2. U. S.
Who is the largest producer of robusta coffee?
However, in terms of robusta production, Vietnam is the leading producer of robusta coffee globally. Over 90% of the coffee grown and produced in Vietnam is of the robusta variety. Vietnam is the world’s leader in robusta production, and you can also find robusta beans growing in Brazil, India, and the Democratic Republic of the Congo.With the majority of the world’s robusta coffee grown in Vietnam, Vietnamese coffee culture is intimately tied to this coffee bean. As the world wakes up to robusta, they’ll naturally also wake up to Vietnamese coffee that has been consumed for centuries.
How big is the coffee commodity market?
The global commodity coffee beans market size was valued at approximately USD 102. USD 157. CAGR) of 4. Whether you’ve got a bag of whole beans or pre-ground coffee, that 1kg bag ends up giving you the same amount of ground coffee. You guessed it, 1kg. So it doesn’t matter if you buy whole beans or ground coffee, you end up with the same amount of cups from your purchase.For a 1kg bag of coffee beans you should expect to get around 120-140 cups of coffee. Based on variable data and on a standard single shot coffee. If we’re going double shot all the way, you’re looking at around half of that at around 60-70 cups of coffee per 1kg of beans.For a 1kg bag of coffee beans you should expect to get around 120-140 cups of coffee. Based on variable data and on a standard single shot coffee.
What is happening in the coffee market?
Over the past year, the coffee industry has been turned on its head. Coffee prices have surged by over 100% in a year due to strains caused by climate change, political risk, and logistical chaos. Cacao hit a record $10,000 per tonne in 2024, with potential parallels emerging. The USDA’s FAS forecasts that 2024/25 ending stocks will fall by -6. Separately, the USDA’s FAS on November 22 projected Brazil’s 2024/25 coffee production at 66. MMT, below its previous forecast of 69. MMT.