Coffee prices set to keep rising

[WORLD] If you’ve noticed your daily coffee bill creeping up recently, you’re not alone. Coffee prices have been on the rise, and the outlook isn’t promising for those hoping for a break from the upward trend. The cost of coffee beans has surged to new highs, and experts are warning that prices could continue to climb, creating a difficult scenario for consumers who rely on their morning brew. From your morning espresso to the instant coffee in your pantry, this increase is being felt worldwide.

The coffee price hike is primarily driven by several global factors that are impacting both the supply and demand sides of the coffee market. The two most commonly traded types of coffee beans—arabica and robusta—are seeing significant price jumps due to a variety of challenges.

Arabica coffee, known for its smooth flavor and common in higher-end coffee products, has reached an all-time price high. A significant contributor to this is the ongoing drought in Brazil, which has severely affected its coffee harvest. As the world’s largest coffee producer, Brazil plays a critical role in global supply, and its production shortfalls are being felt worldwide.

At the same time, robusta coffee, typically used for instant coffee, is also facing a supply crunch. Vietnam, the second-largest coffee exporter after Brazil, has seen a decline in its coffee output, thanks to a shift in farming priorities. Vietnamese farmers have increasingly turned to durian production, as the fruit’s skyrocketing demand in China offers a more profitable alternative. According to BMI, a Fitch Solutions Company, “unit values for Vietnamese coffee have been overtaken by those of durians over recent years.” This switch is worsening the global shortage of robusta beans, pushing prices higher.

The Impact of Global Conflicts and Supply Chain Issues

As if weather-related disruptions weren't enough, global conflicts are also making things worse. The war in the Middle East has contributed to the rising cost of shipping, as commodity-carrying vessels now need to take longer, more costly routes around Africa instead of using the shorter Red Sea and Suez Canal paths. This disruption adds yet another layer of cost to the already strained coffee supply chain.

Helen Dickinson, the Chief Executive of the British Retail Consortium, highlighted that the surge in coffee prices is part of a broader trend of increasing food prices, warning that “climbing global coffee prices could threaten to push the morning costs higher in the coming months.”

China's Growing Coffee Demand

Another major factor driving up the cost of coffee is the increasing demand for the beverage in China. According to reports, the country has more than doubled its coffee imports in recent years. This growing interest in coffee consumption, coupled with other supply chain issues, has put additional pressure on global coffee supplies.

The effect of this increase in demand from China is amplified by the fact that many coffee-growing regions, particularly in Southeast Asia, are struggling with both natural and market forces. As these countries shift agricultural practices to meet new market demands, the supply of coffee beans continues to tighten, further inflating the prices.

Consumer Impact: Higher Prices Ahead

For coffee drinkers, this is bad news. The price of a cup of coffee, whether brewed at home or purchased at a café, is likely to continue climbing in the coming months. The combination of high production costs, poor harvests, and a global supply shortage is making it increasingly difficult for coffee prices to stabilize.

In the UK, for example, consumers are already feeling the pinch. Dickinson noted that February saw “price hikes for breakfast items such as butter, cheese, eggs, bread and cereals,” and coffee was no exception. With commodity prices rising, this trend is expected to continue, further squeezing household budgets that are already stretched by inflation.

The Future of Coffee Prices

As we move further into 2025, coffee drinkers can expect to see the cost of their favorite beverage continue to climb. According to analysts at Rabobank, prices for coffee beans surged by an alarming 90% last year, and with no immediate relief in sight, there is concern that the cost of coffee could rise even further.

The situation in Vietnam, with its shift from coffee production to durian farming, is particularly concerning for robusta coffee lovers. While this change may be beneficial for those in search of durians, it poses a significant risk for coffee production in the region. As the demand for durian grows, coffee farmers may continue to move away from their coffee crops, making it even harder to meet the growing global demand for coffee.

The Growing Cost of Your Daily Brew

For many coffee drinkers, the rise in prices is not just about the occasional price increase at the local café. It’s about a steady climb in the cost of one of the world’s most beloved beverages. Whether you prefer a strong espresso to kickstart your day or a relaxing cappuccino, the increasing cost of coffee is something that will be felt globally.

Coffee shops, too, are grappling with these changes. Many are already passing on the higher costs to customers, making the price of a cup of coffee even more expensive. Consumers may find themselves paying more for less, as portions shrink and cafes adjust their menus to cope with rising input costs.

Can Anything Be Done?

While the outlook for coffee prices is grim in the short term, there are a few ways to manage the impact of higher prices. For those who enjoy coffee at home, buying in bulk and storing beans properly can help reduce the overall cost per cup. Switching to more affordable coffee blends or opting for local roasters may also provide some relief.

Additionally, coffee drinkers may consider switching to robusta-based coffees, which are generally less expensive than arabica. While this may not be ideal for coffee aficionados who prefer the smoother taste of arabica, it could be a cost-effective solution for those who are looking to save money.

The news about rising coffee prices is disappointing for many consumers who rely on their daily cup of coffee. With factors such as climate change, shifting agricultural priorities, global conflicts, and growing demand from countries like China, coffee prices are set to continue their upward trajectory. As a result, both coffee lovers and coffee shop owners will likely face higher costs in the coming months.

For now, the best advice is to brace for higher prices, make adjustments where possible, and keep an eye on global trends that might help mitigate the cost increases. The world’s coffee market is facing challenging times, and it’s clear that consumers will be feeling the impact for the foreseeable future.