The Global Coffee Trade Is in Crisis — but It Could End Soon

About one-third of the world starts their day with a cup of coffee. According to Drive Research, three out of four Americans enjoy a cup daily, while approximately 36% of people drink between three to five cups of coffee each day. This makes it particularly troubling to learn that the global coffee trade is reaching a crisis point due to the significant surge in prices, with retailers outright refusing to purchase coffee at its current rates. 

In early March, Reuters reported from the U.S. National Coffee Association convention, where retailers expressed their shock at current pricing, and growers shared their astonishment at not being able to sell their coffee products. 

“We would usually be sold out by now, but so far, we sold less than 30% of production,” Renan Chueiri, the director general at ELCAFE C.A. in Ecuador, shared about his company's instant coffee. “The big price increase eats clients' cash flow. They don't have all the money to buy what they need.”

One roaster in the U.S., who wished to remain anonymous, told Reuters that conditions have become so dire that his clients are uncertain about remaining in business. “They don't know if they will be able to sell their product at the new prices,” he said. “Some people are going under.” The source also pointed out that this situation extends to grocery stores in the U.S., which have begun to resist the rising costs.

Moreover, those grocery stores that do push back are in good global company. In early March, European supermarkets Jumbo and Picnic faced a dispute with JDE Peet’s, the owner of Douwe Egberts coffee and Pickwick tea, two popular brands in the United Kingdom, Belgium, and the Netherlands, over its new pricing recommendations, which included price increases of up to 30%.

“We find this unacceptable for Dutch consumers,” Michiel Muller, the CEO of Picnic, told NL Times. However, it appears the retailers have lost the negotiations, with NL Times reporting that both supermarket chains will now pay “significantly” more for the brands. 

“JDE is increasing its profitability at the expense of consumers and retailers,” Muller said. He noted that the new wholesale pricing would be “impossible for consumers to absorb.” But while Muller believes retailers will have to take a hit on some of the cost to keep prices down for consumers, customers will still “have to pay more for their coffee.” 

However, these high prices might not remain for long. As Reuters reported, if Brazil successfully achieves a large harvest, Arabica coffee futures could drop by as much as 30% by the end of 2025, bringing it down to $2.95 per pound, which would return it to November 2024 pricing. The same applies to Vietnam, the largest producer of Robusta coffee. As one participant in Reuters' poll observed, “If weather conditions remain favorable (in Vietnam), we expect production to recover given the investments made by farmers in recent years.”