Food & Climate
World coffee prices reached a multi-year high in 2024 – increasing 38.8% on the previous year’s average – mostly driven by inclement weather affecting key producing countries, and this trend may continue in 2025, the Food and Agriculture Organization of the United Nations (FAO) said today.
According to an FAO note on global coffee market trends, in December 2024, Arabica, the higher quality coffee favoured in the roast and ground coffee market, was selling at 58% up on a year ago, while Robusta, used mainly for instant coffee and blending, saw a price surge of 70% in real terms.
This marked a narrowing of the price differential between the two varieties for the first time since the mid-1990s, according to the FAO’s statement that “Food & Climate” platform received.
The top 10 coffee growers around the world are: Brazil, Vietnam, Colombia, Indonesia, Honduras, Ethiopia, Peru, India, Guatemala, and Uganda.
Brazil, which Situated in South America, is the top producer of coffee. They produce 2,68 million metric tons of coffee on average every year. Brazil has also held onto its first-place position as the world’s largest coffee producer for over 150 years.
Brazil’s climate had been perfect for growing Robusta and Arabica coffee beans, as it offered the right amount of rainfall and sunlight, combined with its low elevation and even year-round temperatures, this offers the perfect climate for coffee production.
Coffee prices in 2025
FAO said that coffee prices for export may rise further in 2025 if major growing regions experience further significant supply reductions.
Key factors behind the recent price increase include limited export quantities from Viet Nam, reduced output in Indonesia, and adverse weather impacting coffee production in Brazil.
In Viet Nam, prolonged dry weather caused a 20% drop in coffee production in the 2023/24, with exports falling by 10% for the second consecutive year.
Similarly, in Indonesia, coffee production in 2023/24 declined by 16.5% year-on-year on the back of excessive rains in April-May 2023 that damaged coffee cherries. Exports dropped by 23%.
In Brazil, dry and hot weather conditions prompted successive downward revisions to the 2023/24 production forecast, with official estimates shifting from an anticipated 5.5% year-on-year increase to a 1.6% decline.
Higher shipping costs were also found to be one of the factors contributing to the increase in world coffee prices.
Early data indicates that in December 2024, the increase in world prices translated into consumers paying 6.6% more for their coffee in the United States and 3.75% more in the European Union, compared to the same period in 2023.
“The high prices should provide incentives to invest more in technology and research and development in the coffee sector – which relies largely on smallholder farmers – to increase climate resilience,” said Boubaker Ben-Belhassen, Director of FAO’s Markets and Trade Division, adding that climate change is impacting coffee production in the longer term. FAO supports many of the coffee-producing countries to help farmers adopt climate-resilient techniques that also contribute to restoring biodiversity loss.
Smallholder farmers play a vital role
Coffee is one of the most widely consumed beverages worldwide and ranks among the most traded commodities globally. It sustains the livelihoods of some 25 million farmers and creates additional employment throughout the coffee value chain.
For many low-income countries, coffee exports represent an important source of revenue, generating foreign currency reserves essential for securing access to global markets for the import of goods and services. International coffee prices began rising in late 2023 and continued climbing through most of 2024, due to limited supplies from Viet Nam and Indonesia and adverse weather affecting production in Brazil.
Brazil and Viet Nam together account for nearly 50% of world coffee production.
Smallholder farmers play a vital role in the coffee industry, accounting for 80% of global coffee production.
Global coffee production exceeds $20 billion annually. The total value of coffee trade is estimated at more than $25 billion annually. In 2023, global coffee production reached 11 million tons, with export revenues accounting for 33.8% of total merchandise exports in Ethiopia, 22.6% in Burundi, and 15.4% in Uganda.
In the same year, the European Union and the United States were the largest importers of coffee. Global coffee industry revenues exceed $200 billion annually.