Coffee gets more expensive: reasons and forecast

Not so long ago, a cup of coffee seemed like a mere everyday indulgence. Today, however, it has become a symbol of global challenges, including climate, economic, and logistical issues. From 2023 to early 2025, coffee prices reached record highs. Arabica and Robusta, the basis for most coffee beverages worldwide, were hit hardest.

According to The Independent, prices for Arabica have risen by 190% since the beginning of 2023, and prices for Robusta have risen by 263%. In February 2025, the price per pound of Arabica coffee reached $4.20, setting an all-time high in the global market.

Such growth rates are abnormal even for the global agricultural sector. From the beginning of 2024 to the beginning of 2025, the price of Arabica increased by another 20%. Before that, a 70% increase was recorded in just one year.

It's a "perfect storm" for the coffee industry

The causes of the crisis are complex and range from climate change to geopolitics. Lavazza, a market leader, described the situation as a "perfect storm."

Lavazza said the price volatility was driven by a "perfect storm" of droughts in Brazil and Vietnam significantly impacting coffee production and ongoing geopolitical disruption increasing transportation costs and delivery times.

Naturally, a decrease in supply coupled with growing demand led to a jump in prices. This was especially noticeable in countries that import coffee.

What else is behind the rise in prices?

Transportation costs, fertilizer prices, and geopolitical issues have also fueled the increase in the price of black coffee.

In addition to crop problems, the coffee industry faces several global obstacles:

1. Increased transportation costs due to geopolitical tensions in the Red Sea, Panama Canal and Southeast Asia.
2. Increase in prices for fertilizers and other agricultural inputs, in particular due to the war in Ukraine, which restricted the supply of certain mineral fertilizers.
3. Increased demand in Asian countries, particularly in China and India.
4. Speculative activity on the stock exchanges, which traditionally affects short-term price fluctuations.

Lavazza: the worst may be over

Lavazza predicts that prices in the consumer market have already peaked. In the UK, for example, the cost of coffee beans in supermarkets increased by 20% in 2024. According to management, this increase has reached the limit for the end consumer.

"We think that the market reached a peak at the beginning of this year," Giuseppe Lavazza, Chairman of the Board of Directors, said:

While this may be good news for consumers, analysts warn that there will be no sharp decline in prices, as some contributing factors are long term.

What does the future hold for the coffee market?

We should not expect prices to return to those of 2022. In the near future, the market is likely to stabilize at a high level rather than experience a sharp decline. Reasons:

1. Depleted stocks at manufacturers' and distributors' warehouses.
2. Seasonal risks, such as the recurrence of droughts in Brazil and Vietnam.
3. Logistical instability with no quick fixes.

According to the most optimistic estimates, prices could roll back by 10-15% in the second half of 2025, but only if the weather is favorable in the main producing countries and transportation routes stabilize.

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