UNDERSTANDING COFFEE PRICES
The coffee market is constantly evolving, and as a wholesale client, staying informed about pricing trends is essential for planning and budgeting. In this post, we’ll break down the key factors influencing coffee prices and what that means for your business.
WHY DO COFFEE PRICES FLUCTUATE?
Coffee prices are influenced by several global and local factors, including:
- Global Supply & Demand – The availability of coffee beans is affected by weather conditions, crop yields, and global consumption trends.
- Currency Exchange Rates – Coffee is traded globally in US dollars, so fluctuations in currency exchange rates can impact costs.
- Freight & Logistics – Rising transportation costs, shipping delays, and global supply chain disruptions can affect pricing.
- Production Costs – Labour, processing, and farming practices impact the final cost of green coffee.
- Market Speculation – Investment in coffee futures can drive price volatility.
- Current Market Constraints – Several key challenges are impacting coffee prices right now:
- Severe Weather Conditions in Brazil – Brazil, the world’s largest coffee producer, has faced extreme droughts followed by unexpected frosts, devastating coffee plantations. This has led to a significant drop in output, drastically reducing global supply.
- Tariffs on Colombian Coffee – Recent tariffs imposed (and then instantly dropped) by the Trump administration on Colombian coffee imports have made it more expensive for buyers in key markets, reducing affordability and limiting available supply. This has had a knock on effect to other coffee producing regions, seeing a sudden spike in interest of their current lots and projected harvests.
- Vietnam's Reduced Output – Vietnam, a major producer of robusta beans, has been struggling with lower yields due to adverse weather and logistical challenges, further straining supply chains.
- Global Shipping Crisis – Freight costs have soared due to container shortages, port congestion, and increased fuel prices. Delays in shipments have made it harder to source coffee efficiently, adding further price pressure.
- C Market Prices at Record Highs – Due to all these constraints, the C market (which dictates global coffee prices) has surged to record levels, pushing up costs across the entire industry.
COFFEE PRICES VS. SUPPLY: THE DATA
A closer look at coffee market trends over the last five years shows a clear pattern—coffee prices have been steadily rising while global supply has been decreasing. Our analysis reveals that:
- Since 2020, the price of coffee on the C market has more than doubled, climbing from around 110 cents per pound to over 250 cents per pound in 2024.
- Global coffee supply, measured in million bags, has steadily declined from 168 million bags in 2020 to approximately 150 million bags in 2024.
- This inverse relationship highlights the impact of extreme weather, geopolitical trade policies, and logistical disruptions on pricing.
- The sharpest increases in price occurred between 2021 and 2023, coinciding with Brazil’s severe droughts, Vietnam’s logistical struggles, and the escalation of global shipping constraints.
The graph accompanying this article visually represents this trend, showing how declining supply has driven up market prices, further emphasizing the current challenges facing coffee buyers and roasters.
HOW THIS IMPACTS YOUR WHOLESALE PRICING
At Scout Coffee, we work hard to maintain competitive pricing while ensuring quality and ethical sourcing. However, when our contracted rates end, we must reassess pricing based on market conditions.
- Stable Pricing Periods – We secure contracts to offer price stability, but these agreements eventually expire, meaning new prices may reflect current market trends.
- Sourcing Adjustments – If green coffee prices rise significantly, we may explore different origins or blends to maintain value without compromising quality.
- Transparency – We’ll always communicate price adjustments in advance, ensuring you have the time to plan accordingly.
WHAT YOU CAN DO
- Plan Ahead – If you anticipate higher coffee costs, consider adjusting your menu pricing accordingly.
- Communicate With Us – Let’s discuss your needs and any upcoming changes to ensure a smooth transition.
- Stay Updated – We’ll keep you informed on market trends, so you’re never caught off guard.
Our goal is to support your business with high-quality coffee, consistent supply, and transparent pricing. If you have any questions about your wholesale pricing or upcoming changes, feel free to reach out.
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For inquiries, contact us at roasters@scoutcoffee.co.uk.