At the end of 2024, the price of green coffee exploded, rising dramatically to uncharted levels, culminating in record highs throughout 2025. At the start of 2026, the green coffee market is just as inflated. For many coffee-focused businesses, 2025 was viewed as a stormy year to weather, with an optimistic view that there would be brighter days ahead. It’s clear that we will have to wait a while longer. Many factors have caused the extraordinary volatility in the coffee market. Climate change, extreme weather, rising production costs, global supply chain issues, the list goes on. All have resulted in a much-changed coffee landscape.
Climate Change
Drought and unpredictable rainfall have significantly affected yields in Brazil and Vietnam (the world’s largest producers of coffee). Brazil has experienced unusually arid weather, as well as devastating wildfires. Vietnam has been experiencing long heatwaves and erratic rainfall. Furthermore, as the world rises in temperature, the amount of land available to grow arabica coffee reduces. Arabica coffee plants struggle to grow as temperatures rise.
Weather issues place great pressure on coffee production. The unpredictable supply from the two main global producers has a determining effect on the price of coffee globally. Sadly, the negative effect of climate change on the coffee industry is unlikely to cease, and volatility will become a common factor in the coffee market.
Production Costs
We all know too well the inflated cost of energy over the past few years. Coffee farmers are facing the same issues, along with higher wages (which, of course, is a positive), and increased costs of general farming supplies. The collective effect is an increased cost of production. Coffee farmers must charge more to meet their costs, which in turn pushes up the prices that importers and subsequently coffee roasters pay.
Supply Chain Issues
From farm to cup, coffee is well-travelled. Global logistics has a profound effect on coffee prices. Geopolitical issues, tariffs, and shipping delays due to port closures (such as the Red Sea route) all lead to higher freight costs. Furthermore, increased container costs and shipping congestion add more costs. All of these costs are added to the green kilo price charged to roasters.
Increasing Consumer Demand
Across the world, coffee consumption is rising year on year. Speciality coffee is drunk by more people, in more countries than it ever has been. Wealthy, populous countries like China and those in the Middle East, which have traditionally drunk tea, have started consuming more coffee. Simply put, supply is struggling to keep up with this increased demand, leading to an inflation in prices.
Currency Fluctuations
Green coffee is traded in US dollars. Unstable exchange rates have made it difficult for companies working in other currencies. Added to this, economic volatility in coffee-producing countries further increases uncertainty.
Regulation
The EU Deforestation-Free Regulation (EUDR) is evolving global coffee production methods. Producers are facing increased costs to comply with the new regulations. There is an expectation that regulatory restrictions will further increase coffee prices and reduce supply in certain areas.
Arabica Futures Market
In early 2025, the Arabica futures market soared to nearly $4.50 per lb. As a point of comparison, in early 2024, the market was around $2.00 per lb. The market fluctuated between $3.50 and $4.00 throughout 2025. As a result, the pricing of speciality coffee globally has been forced to change. Coffee roasters have had to adjust prices, margins, and the way they source their products. Absorbing the inflated green coffee costs is not viable anymore.
The Future
The unpredictability of the coffee market and the inflated costs across the supply chain are factors that are unlikely to stop. Climate, rising production costs, logistics, increasing demand, currency pressures, etc will all continue to increase the cost of green coffee (or at the very least keep it high).
We will continue to make efficiencies to absorb our increasing costs as much as possible as time goes on. However, our prices must rise so that we can continue to pay a fair price for our green coffee to support farmers and the environments where coffee is produced. We are committed to roasting and selling speciality coffee in an affordable way that benefits both the farm and the cup.