1. Weekly News

Global

Coffee Prices Expected to Rise Further in 2025 Due to Ongoing Global Supply Deficit

Coffee drinkers are expected to face higher prices in 2025, continuing a trend driven by a global supply deficit for the fifth consecutive year. The United Nations’ (UN) Food and Agriculture Organization (FAO) forecasts further price hikes, citing reduced exports from Vietnam, lower production in Indonesia, and adverse weather conditions in Brazil, which have all contributed to the ongoing shortage. Brazil's coffee production forecast for 2023/24 was downgraded from an anticipated 5.5% increase to a 1.6% decrease. Meanwhile, Vietnam's coffee production is also expected to drop, with a 2% decrease forecasted for 2024/25. China's coffee consumption has surged by 150% over the past decade, contributing to global demand, with coffee imports in China expected to exceed 6 million sacks in 2024/25. The European Union (EU) remains the largest coffee importer, followed by the United States (US).

Brazil

Brazilian Coffee Exports Reach Record Levels Despite Feb-25 Decline

Brazil's coffee exports reached a record 33.45 million 60-kg bags for the current harvest season (Jul-24 to Feb-25), despite a drop in Feb-25. Researchers from the Center for Advanced Studies on Applied Economics (Cepea) noted that the 2024/25 season has been characterized by high export volumes. The early surge in exports was influenced by EU regulations on deforestation-free imports, prompting many shipments before the regulation's delay was announced. However, researchers warn that if the EU legislation is enforced in 2025, Brazilian coffee exports could face restrictions. Looking ahead, exports are expected to weaken due to the limited availability of beans from the 2024/25 harvest and the off-season period.

China

China's Coffee Trade in 2024 Sees Strong Export Growth Amid Import Slowdown

In 2024, China’s coffee trade saw robust export growth and a slowdown in imports. Annual coffee and coffee product exports surged to USD 281 million (+96.15% year-on-year) and 61,500 tons (+119.56% YoY), with the Netherlands, Vietnam, and Germany as top destinations. However, Dec-24 exports fell 20.24% YoY to USD 16 million.

On the import side, total annual imports reached USD 1.312 billion (+18.63% YoY) and 233,800 tons (+18.84% YoY), with Brazil as the top supplier at USD 307 million (+36.62% YoY). Despite strong yearly gains, Dec-24 imports dropped 8.31% YoY to USD 109 million, reflecting a short-term decline.

Colombia

Colombia Aims to Boost Coffee Market Share in the US

Colombia, the third-largest producer of high-quality Arabica coffee, is focused on expanding its market share in the US, which accounts for 40% of its coffee exports.The general manager of the National Federation of Coffee Growers (FNC) emphasized that the US has been, and will continue to be, Colombia's top coffee customer. The general manager noted that American consumers have shown a preference for the unique flavor profile of Colombian coffee.

Honduras

Honduras Faces Coffee Crisis Amid Climate Change and Pests

Honduran coffee producers are confronting severe challenges from climate change, including droughts, frost, and unusual rainfall – all of which have exacerbated the spread of coffee rust and leaf spot diseases, affecting both coffee quality and yield. These issues threaten the livelihoods of over 100,000 producers, with small-scale farmers particularly impacted. Although Honduras was expected to be the fifth-largest coffee producer globally in 2024, the climate crisis and pest infestations could prevent this target. The rising incidence of disease has reduced yields, leading to financial difficulties for farmers. Some producers have shifted to organic farming to cope, but limited resources hinder sustainability efforts. Meanwhile, increased fertilizer costs and labor shortages are compounding the financial strain, leaving many farmers struggling to cover their expenses and leading to poverty and migration.

Turkey

Turkey’s Coffee Trade Expands Despite No Local Production

Despite not growing coffee beans, Turkey has become an active player in coffee trade, processing and exporting coffee-related products to 146 countries. From 2020 to Aug-24, Turkey’s coffee exports totaled USD 154.7 million, rising from USD 20.2 million in 2020 to USD 39.7 million in 2023, with USD 34.5 million recorded in the first eight months of 2024. Key buyers included the US, Netherlands, Belarus, Kuzey Kıbrıs Türk Cumhuriyeti (KKTC), and Saudi Arabia. Meanwhile, Turkey’s coffee imports reached USD 1.5 billion over the same period, growing from USD 187.6 million in 2020 to USD 437 million in 2023, with USD 284.4 million imported between January and Aug-24. Brazil, the Netherlands, and Germany remained Turkey’s top coffee suppliers.

2. Weekly Pricing

Weekly Coffee Pricing Important Exporters (USD/kg)

Yearly Change in Coffee Pricing Important  Exporters (W12 2024 to W12 2025) 

Brazil

The price of coffee in Brazil has risen significantly to USD 9.85/kg in W12, driven by several key factors. The price increased by 15.61% week-on-week (WoW), 19.25% month-on-month (MoM), and 63.35% YoY. Lower-than-expected yields, due to drought conditions and climate risks, have reduced supply, pushing prices upward. The strong demand for premium Brazilian coffee from major export markets like the US and Europe has also supported higher prices. Furthermore, ongoing supply constraints caused by unpredictable weather patterns and market fluctuations, including currency adjustments, have maintained upward pressure on prices. Overall, these factors have resulted in a tight market, with significant price growth over the past year.

Colombia

Coffee prices in Colombia have been on an upward trajectory, increasing to USD 10.03/kg in W12. The prices rose by 3.51% WoW, 22.02% MoM, and 23.52% YoY. This price increase is attributed to a combination of factors. A tight global coffee supply, primarily driven by adverse weather conditions affecting key producers like Brazil and Vietnam, has led to reduced global production. In addition, there is growing international demand for Colombian coffee, particularly in premium market segments, which has further supported the price increase. Colombia’s concerted efforts to expand its coffee exports, especially to the US, have also contributed to the price rise. Together, these factors, combined with the ongoing global coffee shortage, have ensured that Colombian coffee prices remain elevated.

Vietnam

Coffee prices in Vietnam have risen significantly, increasing to USD 5.24/kg in W12. The price change reflects a 0.96% WoW, 1.95% MoM, and a notable 34.36% YoY increase. Several factors are driving these price hikes. First, reduced Robusta coffee production due to dry weather conditions has led to a 25-year low in output, decreasing the overall supply and pushing prices higher. Additionally, strong export demand, particularly from Europe and the US, has kept prices elevated as global markets seek Vietnamese coffee. Farmers are also withholding coffee stocks in anticipation of higher prices, limiting the available supply in the short term and further boosting market prices. These combined factors, including tight domestic supply and limited export volumes, have created upward pressure on prices for Vietnamese coffee.

3. Actionable Recommendations 

Capitalize on Premium Coffee Segments

Given the increasing global demand, particularly for premium coffees from Brazil, Colombia, and Vietnam, coffee producers should consider expanding their focus on premium coffee varieties. This can be done by improving quality control and aligning with market preferences for unique flavor profiles. Producers could emphasize their premium, specialty coffee to cater to growing markets in the US and Europe. This can help producers secure higher prices and offset the impacts of supply shortages.

Bolster Coffee Resilience Through Investments

The increasing influence of climate change, such as droughts in Brazil and pests affecting Honduras, highlights the need for resilience. Coffee producers in regions impacted by erratic weather should consider adopting sustainable farming practices and climate-resilient varieties of coffee. Governments and industry stakeholders could work together to fund research into more drought-resistant and disease-resistant coffee plants. In parallel, investing in technology to forecast weather-related challenges will help in preparing better for such conditions, reducing production losses.

Leverage Export Regulations

In response to the EU’s impending regulations on deforestation-free coffee imports, Brazilian exporters should prioritize early shipments and focus on expanding their presence in markets with less stringent requirements. They could also explore partnerships with certifying organizations to ensure their products meet global sustainability standards. Additionally, producers should monitor regulations in key export destinations and prepare for potential shifts in demand that could result from trade restrictions.

Sources: Tridge, ABC, Agro Info, News Food Mate, Nong Nghiep, Noticias Agricolas, ProPlanta, TRT Haber