The price of coffee tastes more and more bitter. The prices of Arabica, the most consumed variety, like that of Robusta are close to peaks on the financial markets. The first, up 90% over the year 2024, broke its 1977 record on December 10, at $3.48 per pound on the New York Stock Exchange. The price of robusta is also high.
At the origin of this outbreak, accentuated by speculation, is the fear of poor harvests in Brazil and Vietnam, the world’s 1st and 2nd producers, hit by drought, after several years of demand exceeding supply. Added to this were “disruptions in the Red Sea which lengthen transport from Asia to Europe, delays in certain ports”, adds Carlos Mera, analyst at Rabobank.
Buyers anticipated the application of European regulations on deforestation – ultimately postponed – and the potential increase in customs duties by Donald Trump. From now on “prices should fall rather than increase”, estimates the analyst. But with coffee stocks low, “we have to expect volatility.”
More climatic hazards
The climate, particularly for Arabica, grown at altitude, is a source of uncertainty. Robusta is more resistant, but less popular. Around 175 million bags (60 kg) of coffee should be produced in 2024-25: 56% Arabica, 44% Robusta, according to the US Department of Agriculture.
Established in intertropical zones, the two varieties are exposed, describes Guillaume David, of the Center for International Cooperation in Agricultural Research (CIRAD): late frost on the flowers, rains at the wrong time, too intense monsoons, beetles… “This year we saw hazards in Brazil AND Vietnam, before it was one OR the other,” notes the researcher.
New consumers
At the same time, demand continues for this small grain born in Africa and largely globalized. 2024 has “seen a small drop in demand in mature markets”, specifies Carlos Mera, who sees in Europe an effect of “the cost of living crisis” and in the United States “perhaps” of the rise of treatments for weight loss, enemies of latte coffee.
On the other hand, it is “rising sharply in China”. Over the year 2023-2024, the country imported 4.3 million bags, compared to 1.5 million four years before, according to the expert. At the same time, China is the 13th largest producer in the world, with around 2 million bags per year.
-Brazil provides around 40% of production, ahead of Vietnam (17%), Colombia (7%), Indonesia (6%), Ethiopia (5%), Uganda, India, Honduras, Peru, Mexico… Some countries will be able to increase at altitude, like Brazil which even has large flat spaces allowing cultivation to be mechanized. But for Ecuador, Burundi or even Colombia, it will be difficult.
Adapt cultural practices
Africa could play a key role with, for example, Togo or the Ivory Coast, which have been able to abandon coffee in favor of cocoa, or Kenya, which has sometimes replaced it with avocado, suggests Guillaume David, also evoking Indonesia, which in ten years has multiplied quality origins.
Agronomists call above all to adapt cultural practices for what is originally a forest plant: establish plant cover to protect it from the sun and bad weather, move away from monoculture to better fight against pests, limit pesticides and diversify income (lumber, firewood, pepper, etc.).
Small producers, large operators
How can we support small farmers, who account for two thirds of global production (with less than one hectare) and remain numerous below the poverty line? In October, the G7 approved the creation of a Global Fund for Coffee Resilience, driven by the International Coffee Organization (OIC, producing countries) and businesses. Objective: find public-private funding to support innovation and adaptation.
Many experts also emphasize the need for fairer remuneration for farmers, against a backdrop of massive fluctuations in coffee prices in recent years. Fair trade, which guarantees a minimum price, covers 5% of production. For the rest, more than 80% of coffee is collected by a few trading giants, for international processors who are also very concentrated.
If at high prices producers can benefit from improved prices, the fall is severe at low prices, often forcing them to no longer maintain the plants, fueling the infernal cycle, concludes Nicolas Eberhart, of the French cooperative Ethicable.
