The Rising Costs of Green Coffee: What’s Behind the Price Surge?
The cost of food items in the last several months (or what feels like several years) has steadily increased with seemingly no stopping point. Some experts call it inflation. Others call it corporate greed. It’s more than likely a combination of both. But don’t quote me on that, I’m no economist.
But one thing is for certain, the cost of green coffee—the raw, unroasted beans that fuel our daily brews—has been climbing. So if you’ve noticed higher prices on your favorite coffee recently, you’re not alone.
Several global factors such as weather-related shortages in Brazil, rising market prices on the U.S. Coffee C Futures exchange, along with inflation, are contributing to these increased costs.
I’m going to take a few minutes to break down each of these points and do my best to explain why costs are rising and what you can expect from the coffee industry the next several months.
Brazil’s Coffee Shortage: A Weather-Driven Crisis
Brazil is the world’s largest producer of coffee and plays a massive role in global supply. Roughly 3.3 - 3.9 metric tons of raw coffee per year. Unsurprisingly, Brazilian coffee is the most purchased coffee among coffee roastery globally, this includes Craig’s Coffee (this year I plan to import more than 10,000 lbs of Brazilian coffee.)
Thus when Brazil’s coffee output is strong, meaning the country is producing and exporting A LOT of green coffee, coffee prices around the globe tend to stabilize. But when production falters, from things like a crop shortage or export difficulties, it create ripple effects through the entire industry.
In recent years, especially in 2024, Brazil has faced severe weather challenges that have directly impacted coffee crops. A combination of drought and unexpected frosts last year in key growing regions has significantly reduced yields. These extreme weather conditions have stressed coffee plants, reducing both the quality and quantity of harvested beans.
This shortage is concerning for “western” coffee drinkers, since so many roasters source coffee from Brazil. With fewer beans available, buyers around the world are competing for a smaller supply, pushing prices higher.
a commercial green coffee harvester picking coffee cherries in Brazil.
U.S. Coffee C Futures Market: A Barometer for Pricing
The U.S. Coffee C Futures market, also called the “C Market,” which determines global benchmark prices for “commodity coffee”, has been reflecting these supply constraints. Futures prices have surged in response to Brazil’s lower production and overall uncertainty in the global coffee supply chain.
To give a brief overview of the coffee marketplace and the C Market, I have to define a few key components. First is “commodity coffee,” which typically differs from “specialty coffee,” in that commodity coffee refers to coffee traded as a standardized product, primarily based on volume and price rather than quality. Specialty coffee is typically defined by higher quality & traceability, often sold at a premium price that is based on quality over volume. While many specialty coffee prices aren’t determined by the C Market, it still plays a massive impact on specialty coffee prices in the global marketplace. For reference, I source only specialty coffee.
The C Market has also surged due to ongoing weather crises and global warming in other coffee-producing regions such as Colombia and Central America, which have also been dealing with weather challenges, labor shortages, and rising production costs.
As of early 2024, the C Market prices have remained volatile, fluctuating between $1.80 and $2.20 per pound, a significant increase compared to previous years when prices often hovered around $1.00 to $1.50 per pound. This increase is largely due to supply disruptions and speculative trading, as investors anticipate further shortages.
In general, the cost of raw coffee is determined by the C Market plus additional costs such as import/export fees, freight, and logistics taken on by the importer. These costs range between $1-$3 in addition to the C Market price. EX: if the C Market is at $4, the actual cost of green coffee could be between $5 and $8 per lb. That’s nearly a 100% increase in the cost of raw coffee in just 1 year.
I wrote a short blog post explaining the C Market in more detail which you can read HERE.
*Disclaimer: I’m not economist nor do I consider myself an expert on how the prices of coffee are determined. I did my best to relay the information above without biased and based on what I’ve read, heard, and seen directly. If you’re interested in learning more about coffee’s global supply chain, I highly encourage you check out the work by Christohper Feran.
the C Market as of February 10th, 2025.
How This Affects Coffee Roasters & Consumers
For coffee roasters, higher green coffee prices mean increased costs across the board. It’s not just the raw beans.. freight, shipping, and operational expenses have also risen, adding further financial contraints. Many small and medium-sized roasters are facing tough decisions about pricing while trying to maintain quality and consistency for their customers.
For consumers, this means you’ll likely see coffee prices trending upward in cafes, grocery stores, and online retailers. While myself and so many coffee roasters like Craig’s Coffee strive to keep our prices fair and transparent, the reality is that rising costs impact everyone in the supply chain.
What’s Next?
Looking ahead, much depends on Brazil’s next harvest and overall market conditions. If weather patterns improve and production rebounds, we may see some price relief later in the year. However, if supply shortages persist, coffee prices could remain high for the foreseeable future.
And while the C market does have a massive impact on specialty coffee, it won’t have as big of an impact on the specialty coffee, but still mas a major influence on the overall marketplace.
Have any questions or comments about this?
Shoot me an email and let’s chat! drink@craigs.coffee