Coffee Commodity Value and Coffee Bean Purchasing: Global Trends and Impacts

What Is the Coffee Commodity Price and Why Is It Important?

The coffee commodity price refers to the global market price determined on exchanges, which serves as a reference in the trade of coffee beans worldwide. Especially the Arabica coffee futures contract traded on the New York Intercontinental Exchange (ICE) is commonly referred to as the "C market" and is considered the main benchmark for global Arabica prices. This commodity price is formed for coffees that meet certain standards regardless of quality differences and directly affects the entire supply chain—from how much coffee farmers can sell their products for to the raw coffee costs for roasters.

Indeed, for coffee professionals and coffee shop owners, fluctuations in the commodity price are a critical indicator as they determine the cost of the green coffee beans they purchase. For instance, in 2022, when coffee futures in New York rose above $2.20 per pound, green coffee prices increased rapidly worldwide. This situation affected the selling prices of even micro-lot, high-quality coffee producers in countries like Ethiopia and Colombia; and likewise, when the market dropped, farmers had to earn less even though their production costs remained unchanged.

Therefore, the coffee commodity value is of central importance for both product pricing and the earnings of stakeholders across the sector.

Historical Coffee Price Trends and Fluctuations

Coffee commodity prices have historically shown significant volatility. Due to changes in supply-demand balance, climate events, and economic conditions, prices have experienced sharp ups and downs over time. In the late 1990s, coffee prices remained under pressure for an extended period due to overproduction and stockpiling; in 2001, prices dropped to as low as $0.42 per pound, creating a crisis for producers. The first decade of the 2000s saw a recovery in prices, driven particularly by increased demand in emerging markets (with a 3.4% annual growth in consumption) and the growth of the specialty coffee segment.

Global coffee prices peaked in April 2011, when tight supply—especially in Arabica—and strong demand pushed prices to levels not seen since the 1970s. In 2011, the price of coffee reached a record high of $3.06 per pound. However, several consecutive years of oversupply triggered a downward trend in prices. The period from 2012 to 2019, except for brief spikes in 2014 and 2016, was generally marked by declining prices, reaching some of the lowest levels in recent years in 2019. By late 2018 and mid-2019, coffee prices fell below $1.00, leaving many small-scale farmers in a difficult situation (with a low of approximately $0.87 per pound in 2019).

 Figure 1: The trend of annual average coffee commodity prices between 2000 and 2025 (US$/lb). After hitting a low point in 2001, prices began to rise again in 2011 and especially after 2021, reaching record levels in 2024–2025.

Table 1 summarizes the changes in recent years. The sharp jumps in prices, particularly in 2021 and 2024, are especially noteworthy.

^† The ICO Composite Index is a combined indicator of various coffee types.

The data above highlights the intensity of volatility in coffee prices. After bottoming in 2019, the market surged in 2021 due to post-COVID demand recovery and supply shocks like severe frost and drought in Brazil. Between mid-2021 and early 2022, prices spiked—by February 2022, prices were 64% higher than a year earlier. Arabica prices rose faster than Robusta, largely due to Brazil’s significant share in Arabica production and frost damage in Minas Gerais. After easing in mid-2022, prices spiked again through late 2023 and into 2024, with a 38.8% average global price increase that year, reaching multi-year highs. In December 2024, Arabica prices were up 58% year-over-year, and Robusta 70%, narrowing the gap between them for the first time in decades. By early 2025, this trend continued: in February, the ICO composite index reached a historic nominal high of 354.32 cents/lb—an extraordinary 94% increase from the prior year—though prices later corrected slightly. This level of volatility intensifies the need for risk management across the coffee sector.

Behind these dynamics lies the inelastic nature of both coffee supply and demand. Coffee consumption is relatively price inelastic—consumers continue drinking it even when prices rise. On the supply side, coffee trees have a long growth cycle, so supply is also price inelastic (estimated elasticity ~0.25). Therefore, small drops in production or small demand increases can create imbalances and trigger sharp price movements. The 2024 price surge resulted from just such a mismatch: poor weather in key producing countries (Vietnam, Indonesia, Brazil) reduced output, while post-pandemic global demand continued rising. For instance, in Vietnam’s 2023/24 season, prolonged drought reduced production by 20%; excessive rain in Indonesia cut yields by 16.5%; and Brazil’s expected increase turned into a 1.6% decline. If these supply issues persist in 2025, prices could rise further.

Impact of Price Changes on Producer Regions

South America, especially Brazil and Colombia, dominates coffee production. Brazil alone accounts for roughly one-third of global output and grows both Arabica and Robusta (Conilon). Colombia is a major Arabica producer. Rising commodity prices can boost export revenues and farmer incomes. In 2021–2022, higher prices benefited Brazilian exporters and contributed to Colombia’s GDP. However, high prices don't always ensure prosperity. Volatility leaves small farmers uncertain and hinders agricultural planning. When prices were low in 2019, many Latin American farmers couldn’t cover costs; some considered abandoning coffee farming. Even in high-price years like 2011 or 2024, production often drops due to droughts or frosts, limiting total income. Large producers in Brazil may manage volatility better, but smallholders—who grow ~80% of the world’s coffee—are disproportionately affected. Thus, price drops mean hardship; rises offer chances to invest or repay debt.

In Brazil, due to its market size, domestic weather conditions and output strongly influence global prices. For example, a major frost in July 2021 damaged Arabica trees, triggering a global price spike. Affected farmers lost crops, while others sold at record prices. In Colombia, unusual rainfall (e.g., La Niña effects in 2022–2023) hurt quality and yield. Despite higher prices, total revenues fell in some regions. Overall, price increases aid unaffected producers and national revenues, while price drops push vulnerable farmers toward poverty.

Africa, with coffee’s birthplace Ethiopia at the forefront, is another key producer. Ethiopia is among the top Arabica exporters and has high domestic consumption. Uganda is known for Robusta but also produces some Arabica. Price changes shape both household and national economic realities.

In many African economies, coffee is a top source of foreign exchange. In 2023, coffee made up 33.8% of Ethiopia’s and 15.4% of Uganda’s total export revenues. Such dependence means that global price swings directly impact their economies. High prices boost export earnings, state budgets, and millions of farming households. In 2024, robust Robusta price increases (+70%) brought major gains to countries like Uganda. FAO data showed Uganda’s 2023 coffee revenue covered over 80% of its food import costs—highlighting coffee’s role in food security and trade capacity.

Conversely, price drops bring hardship. In 2018–2019, falling prices pushed Ethiopian farmers toward alternative crops and caused economic strain. Prolonged low prices hurt investment, productivity, and trap families in poverty. Many coffee farmers already live below the poverty line—some estimates suggest ~80%. In smaller African economies like Burundi and Rwanda, any price swing directly affects rural livelihoods (e.g., Burundi’s 2023 coffee exports made up 22.6% of total exports).

In summary, for African producers, high prices provide a lifeline. Farmers can repay debt, invest in agriculture, or send children to school. Some countries even use coffee income for infrastructure investment. However, climate change poses growing risks (discussed below), often hitting Africa harder and limiting benefits even during price surges.

Impact on Direct Trade Importers and the Coffee Supply Chain

Coffee price fluctuations deeply affect not only producers but also importers—especially those buying directly from farms—and the broader supply chain. Importers purchase green beans from producing countries and supply roasters or distributors. In specialty coffee, many work via direct trade relationships and pay premiums above commodity prices. But these relationships aren’t immune to the global “C market.” Even in specialty, the base price often links to the C market (e.g., C + $0.50/lb). Thus, rising prices increase import costs, while falling prices reduce them—but both scenarios carry sustainability challenges.

When prices rise sharply, importers may face short-term cash flow issues. For example, if prices double in six months and an importer hasn’t locked in rates, they’ll need double the capital. In 2021–2022, high collateral and credit costs posed challenges for some. Some exporters tried to cancel earlier low-price contracts—creating trust and supply risks. Importers often hedge, but not all small businesses can afford to.

When prices fall, another challenge emerges: some importers, especially in ethical sourcing models (e.g., Fair Trade), commit to paying minimum prices regardless of market rates. This protects producers but increases costs. If buyers won’t absorb the difference, the importer’s margin shrinks. Some roasters and importers now aim to establish “living income” prices decoupled from market volatility. This approach promotes long-term sustainability but adds pressure in the short term when market prices are low.

Coffee shop owners and roasters also feel the impact indirectly. Importers’ rising costs affect roaster prices, which influence retail coffee pricing. For example, in 2024, Australia’s Padre Coffee reported needing to raise prices due to rising green coffee costs. Retail coffee prices rose 5–10% in many countries by late 2024, driven largely by raw material costs. In the U.S., consumers paid 6.6% more for coffee by December 2024 than the previous year; EU retail prices rose 3.7%.

Future Outlook: Climate Change and Growing Demand

Two key forces will shape future coffee commodity trends: climate change and rising global consumption. Experts agree both will put upward pressure on prices over the medium to long term.

Global warming poses a major threat to coffee farming. The crop grows in a narrow tropical highland zone and is highly sensitive to temperature and rainfall changes. Models predict that suitable growing areas could shrink by up to 50% by 2050. Arabica, in particular, prefers cooler climates and is at greatest risk. Studies forecast a 50–80% decline in Arabica production by mid-century. Today’s ~175–180 million bag output may struggle to meet future demand. Climate change also causes extreme weather (droughts, frosts, storms) and spreads pests and diseases (e.g., coffee leaf rust in Latin America in the 2010s), all destabilizing supply and threatening long-term availability.

Meanwhile, demand continues rising steadily. While consumption is nearing saturation in Europe and North America, it’s rapidly growing in emerging markets like Asia and Africa. In 2023, global coffee consumption hit 175.6 million 60kg bags (~2.25 billion cups/day). ICO projects annual growth of ~2%, with large populations in China, India, Indonesia, and Nigeria pushing demand even higher. The 2023/24 forecast sees a 2.2% rise to 177 million bags. Long term, coffee could grow 4–5% annually through 2030. Unless supply keeps pace, this will inevitably push prices up.

In a scenario where climate change constrains supply and consumption continues to rise, coffee commodity prices are projected to trend upward in the coming years. Indeed, the record-high price levels at the beginning of 2024 can be seen as a reflection of the market’s concerns about the future. The FAO’s baseline scenario for 2025 suggests that even in the absence of severe climatic disruptions in major producing regions, prices are likely to remain elevated. If unexpected supply shocks occur—such as another frost event in Brazil or a coffee leaf rust outbreak in Central America—further price increases could follow.

On the other hand, efforts are underway in the coffee sector to enhance productivity and develop climate-resilient farming practices. Adaptation strategies on the agenda include new coffee varieties grown under shade, genetically disease-resistant strains, and agroforestry techniques. The aim of these efforts is to mitigate the effects of climate change on production and keep supply as stable as possible. Still, experts emphasize that coffee production costs will rise in the coming decades due to extra investments required for irrigation, fertilization, and planting shade trees, and this will inevitably be reflected in prices.

In conclusion, the intersection of climate-induced supply risks and rising global demand creates a “dual pressure” likely to push coffee commodity prices upward in the medium to long term. Under these conditions, both producers and buyers in the coffee trade are expected to develop more robust risk management strategies—such as forward contracts and weather insurance. Additionally, as part of sustainability initiatives, some large roasters and retailers are establishing funds to combat climate change and support producers, which are also slightly affecting costs.

Conclusion

The coffee commodity price is a critical indicator shared by all stakeholders in the coffee sector. Coffee professionals and café operators can manage their costs and set pricing strategies by understanding and anticipating price trends. Recent fluctuations have demonstrated just how sensitive the coffee market is to fine balances. Across coffee-growing regions from South America to Africa, millions of smallholder farmers are directly affected by these price swings, experiencing periods of prosperity or crisis.

Likewise, importers purchasing directly from farms and players in the specialty coffee sector face both opportunities and risks stemming from global commodity prices. Looking ahead, with constrained supply growth under the pressure of climate change and increasing global demand, coffee commodity prices are likely to remain high. This situation may require a comprehensive restructuring of the supply chain, from café owners to national economies.

The sector’s ability to adapt—through technological innovation and international cooperation (e.g., fair trade, farmer support programs, climate financing)—will be crucial to overcoming these challenges. Ultimately, careful analysis of developments in coffee commodity pricing will remain an indispensable tool for coffee professionals in both daily decision-making and long-term sustainability planning.

D.EMRE KURTULUŞ