Here at Poblado Coffi we’ve been advocates of the Speciality coffee market as it has allowed us to be slightly protected from the volatility of the global commodities market, which constantly changes, and at times leaves farmers with prices so low they end up making a loss.  However, the price for a lb of coffee has just surpassed $4 (an all time high), which has pushed up prices across the board.

As we prepare for the year ahead, it has become clear that we can no longer maintain our current pricing structure. However, before any changes are implemented, we want to take a moment to explain the factors influencing any adjustments we’ll need to make and give you a deeper insight into what’s happening in the coffee world.

Why Are Coffee Prices Rising?

Coffee is one of the most traded commodities in the world, grown in over 40 countries. A few key factors have driven recent price increases:

1.      Global Coffee Pricing: The price of coffee is primarily determined by two global exchanges:

·       The International Exchange (ICE) in New York, which trades Arabica coffee (the type we use)

·       The London International Financial Futures and Options Exchange (LIFFE), which trades Robusta beans.

***Good to know – The C- Market is the global benchmark for the price of coffee futures, primarily focused on Arabica coffee. Coffee futures are financial contracts that obligate the buyer to purchase, or the seller to sell, a specific amount of coffee at a predetermined price on a set future date

2.      Coffee is a highly volatile commodity, with the market influenced by global events: weather, politics, and economics. The prices fluctuate based on factors like harvest predictions and global demand. It's not uncommon for coffee prices to change by as much as 20% in a single week.

3.      Climate Challenges: Brazil, the world’s largest coffee exporter (producing about 40% of global supply), has faced severe weather conditions, including droughts, which have led to a 20% drop in Arabica production for the 2023-2024 season. Arabica beans are more sensitive to climate changes, making them particularly vulnerable to weather-related issues.

4.      Growing Demand: The popularity of coffee continues to rise worldwide, putting additional pressure on production capacity, especially as climate change limits output.

5.      Supply Chain Disruptions: The ongoing Red Sea crisis has caused significant delays in shipping, with port congestion, container shortages, and higher transportation costs all affecting the timely delivery of coffee beans.

6.      The Role of the U.S. Dollar: As coffee is traded internationally, the value of the U.S. dollar plays a crucial role. A stronger dollar can make it more expensive for importing countries, adding further pressure on prices.

The Impact of Weather on Production

Brazil has experienced four consecutive years of weather-related issues affecting coffee crops. While price increases are common, the reserves of coffee held over the past few years are now at their lowest point ever. As a result, the futures market is predicting a poor harvest in 2025-2026, with uncertainty around the extent of the damage. This, combined with increased demand, has led to the significant rise in prices.

What Does This Mean for You?

As we face these global challenges, we are committed to keeping you informed and providing the highest quality coffee. However, to continue doing so, we will be adjusting our prices in line with the changing market conditions. We understand this may be concerning, but we believe that sharing this context will help you understand the factors influencing these changes.

If you’ve got a subscription with us we are giving a grace period before these changes come into effect, we’ll be in touch shortly regarding when these changes will affect you.

Finally, we can assure you that we will only raise prices when we absolutely  have to and we appreciate your continued support and understanding as we navigate these challenges together.

If you visit The Roastery, we have a reduced rate for all of our coffee as a thank you for coming out of your way to visit us in our quite little corner of the world.

See you soon!