Experts forecast coffee prices to rise by up to 40 per cent in 2025. The main reasons are drought in Brazil and abnormal rains in Vietnam, the largest coffee-producing countries, FAO and the International Coffee Organisation said.
The value of arabica rose 69 per cent in 2024, reaching record levels and topping $4.30 a pound on the ICE exchange in early 2025. Drought in Brazil has reduced the crop by 10-11%, causing shortages, while Vietnam’s crop is down 10-20% due to droughts and heavy rains. The International Coffee Organisation warns that market stabilisation should not be expected until 2026-2028.
Retail coffee prices are expected to rise by 10-20%, making coffee in cafes and retail packaging more expensive. This will add to inflationary pressures, as rising coffee prices complement the rising cost of other food products. Experts note that producers will have to invest in drought-resistant varieties and new irrigation systems. There are also rising costs in the supply chain, including higher fertiliser, logistics and credit costs.
According to FAO, global coffee production in 2023 is about 11 million tonnes, of which Brazil accounts for 31%, Vietnam 18% and Indonesia about 7%. Global coffee consumption is growing at about 2% annually and is estimated at 177 million bags per year.
According to publicly available data, the leaders in per capita coffee consumption are Finland (about 12-13 kg per year), Norway (about 10 kg), Iceland (9.8 kg), Denmark (8.7 kg), the Netherlands (8.4 kg), Sweden (8.2 kg), Switzerland (7.9 kg), Belgium (6.8 kg), Luxembourg (6.5 kg) and Canada (6.5 kg).
Rising coffee prices in 2025 could pose a significant challenge for both producers and consumers, and will increase interest in sustainable production and supply expansion to stabilise the market in a changing climate.