The price of coffee has reached a new record, with Arabica beans surpassing $3.44 per pound (0.45 kg), marking the highest level ever recorded. This increase, which has seen prices rise by over 80% just this year, is the result of a combination of factors, including weather conditions in the two largest producing countries, Brazil and Vietnam, and the growing global demand for the beverage.
Experts predict that the reduction in supply from the top exporters, coupled with the rising popularity of the product, will lead to further price hikes. Coffee traders expect that many coffee roasters will be forced to pass on the costs to consumers in the coming year.
According to Vinh Nguyen, CEO of Tuan Loc Commodities, although brands like Nestlé, JDE Peet – owner of the Douwe Egberts brand – and Lavazza have been able to absorb price increases in recent years, they will likely face the need to raise prices in supermarkets as early as the first quarter of 2025.
Lavazza, a giant in the industry, stated that it has worked hard to protect its market share. However, the surge in prices has forced the company to revise its policy. A spokesperson for the brand explained that quality remains at the heart of the relationship with customers, even though they were compelled to adjust their prices.
David Rennie, head of Nestlé, recently admitted that the sector is facing “difficult times” and confirmed that the company will have to review both prices and product sizes.
The previous record for the cost of premium “beans” dates back to 1977 when an exceptional snowfall destroyed Brazilian plantations. In 2024, Brazil was hit by the worst drought in 70 years, followed by heavy rains that raised concerns about future harvests. However, it is not only Arabica crops that are suffering: Vietnam, the main producer of Robusta, has also faced extreme weather conditions that have put the supply of this variety at risk.
Coffee has become the second most traded commodity in the world by volume after oil and continues to see growing global demand, particularly in China, where consumption has more than doubled in the last decade.
