Global coffee prices surged to a multi year high in 2024 rising 38.8% compared to the previous year the Food and Agriculture Organization (FAO) reported. The steep increase was driven by extreme weather in key coffee-producing countries causing supply shortages and pushing prices to unprecedented levels.
In December 2024 Arabica coffee known for its rich flavor was selling at 58% higher than the previous year while Robusta used in instant coffee saw a staggering 70% price surge. For the first time since the mid-1990s, the price gap between the two varieties narrowed significantly.
FAO warned that coffee prices could rise further in 2025 if adverse weather continues to impact major growing regions. Viet Nam the world’s second-largest coffee producer, suffered a 20% drop in production due to prolonged dry conditions, leading to a 10% fall in exports for the second consecutive year. Indonesia also faced a production decline of 16.5% due to excessive rains, with exports plunging by 23%.
In Brazil, extreme heat and dry weather led to repeated downward revisions of its coffee production forecast, turning an expected 5.5% growth into a 1.6% decline.
Higher transportation costs have also played a role in the global coffee price spike. Early data from December 2024 showed that consumers in the U.S. paid 6.6% more for their coffee while prices in the European Union rose by 3.75% compared to 2023.
FAO urged greater investment in climate-resilient farming to protect coffee growers, most of whom are smallholder farmers. “The high prices should encourage research and development to make coffee production more resilient,” said FAO Markets and Trade Division Director Boubaker Ben-Belhassen.
With global coffee trade valued at over $25 billion annually, ensuring a stable supply chain is crucial for millions of farmers and consumers worldwide.