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Coffee in crisis: Why our morning jolt is getting more and more expensive
The price of coffee as a commodity reached an all-time high at the end of January 2025, and many roasters have already raised their prices. Supermarkets and cafés will soon follow. What's behind this dramatic price increase?
Coffee prices are currently experiencing an unprecedented spike on the world's commodity markets. At the end of January 2025, coffee reached an all-time high, and the first roasters have already reacted by upping their own retail prices. It's only a matter of time before supermarkets and cafés follow suit. But what is behind this rapid rise? And what does this mean for consumers, retailers, roasters and producers?
Climate change affects pricing
Over the last five years, the decisive factor defining the price of coffee has been climate change. As a sensitive crop, coffea trees reacts very strongly to temperature fluctuations. The year 2024 was the hottest on record, and 2025 shows no sign of cooling down. Higher temperatures are the new normal, which is having a serious impact on coffee yields. Brazil, which supplies 40 percent of all coffee worldwide, is particularly affected. This year's harvest, which begins in May, is expected to be significantly lower due to the extreme drought that hit Brazilian plantations at the end of 2024.
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Current prices are reflective of the severity of the situation: Back in January 2024, the price of coffee was $1.77 per pound ($3.90 per kilo). This doubled by the end of the year: In December 2024, the market price had soared to $3.48 per pound (($7.65 per kilo). In January 2025, the International Coffee Organization (ICO) reported an average price of $2.996 per pound, while Colombian arabica hit $3.51 per pound.
Ironically, Brazil set a new record for coffee exports in 2024, selling 50.44 million standard 60 kg bags, an increase of 28.5 percent compared to 2023. This brought the Brazilian coffee industry revenues of $1.145 billion, mainly through the export of arabica beans. However, this boom is likely to be short-lived, as climatictic conditions are increasingly jeopardizing yields.
In addition to climatic factors, speculation on the global market is also driving prices up. Agronomists estimate projected crop yields several times a year – and every pessimistic forecast causes prices to increase. In addition, global crises such as wars, inflation and even piracy are further destabilizing the market.
The consequences?
The rising prices could lead to more mindful coffee consumption, transforming the humble cup of joe from an everyday necessity into a luxury that is no longer taken for granted, but is valued as a special experience. At the same time, producers are faced with the challenge of whether cultivation is still worthwhile at all with such volatile prices. Poor harvests and a five-year slump have emptied stocks – but demand continues to rise.
Some retailers still have sufficient stock for the next six months, others only for a couple of weeks. As soon as these reserves are depleted, significant price hikes will be inevitable. The current markeet trends indicate that coffee prices aren't just elevated for the short term, but are indicative of a sea change in the market. It remains to be seen whether this will lead to a shift to coffee as a luxury item or whether consumers will simply give up their beloved morning jolt altogether. However, one thing is clear: the days of cheap coffee are over for the forseeable future.
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