Coffee prices have reached their highest levels in nearly half a century, driven by adverse weather conditions and economic challenges in the world’s leading coffee-producing regions.
The cost of arabica beans surged to $3.18 per pound this week, marking a historic high that could ripple through global markets and everyday coffee consumption, Semfor reported.
The crisis stems largely from climatic disruptions in Brazil, the top producer of arabica beans. The country faced its worst drought in 70 years, followed by torrential rains, severely impacting this season’s coffee harvest. Experts fear the unstable weather will also slash next year’s output, exacerbating the strain on global supplies.
Vietnam, the largest producer of robusta beans often used in instant coffee blends, has also suffered from three consecutive years of low yields. Together, these countries’ production shortfalls are tightening global coffee supplies and driving up prices for both manufacturers and consumers.
Nestlé, the world’s largest coffee company, has already announced price hikes in response to the soaring costs.
The company, known for brands like Nescafé, faces increasing costs due to a combination of climate impacts and looming tariffs. Analysts warn that importers may accelerate purchases to avoid additional expenses tied to international trade policies.
Economic analysts point to both environmental and market forces as drivers of the price spike.
“Roasters will try to import now, because otherwise you will be paying tariffs later,” a trade expert told the Financial Times. This dynamic underscores the intersection of supply chain vulnerabilities and regulatory uncertainties in today’s coffee market.
For consumers, the implications are clear: rising retail coffee prices could strain budgets, particularly for daily drinkers. Coffee shop operators and at-home enthusiasts alike may face higher costs as companies pass down the burden of raw material inflation.