Why Coffee Prices Are Rising and Why We Shouldn’t Expect Them to Drop

For coffee lovers, this essential beverage is becoming increasingly expensive, and unfortunately, there are no signs of this trend reversing. Multiple factors are driving the price surge, including climate change, global politics, and trade wars, all of which are disrupting the coffee supply chain. Starbucks has already begun optimizing operations and cutting staff due to rising costs. Not only major coffee chains but also regular consumers are being forced to pay higher prices. In January 2025, the retail price of ground coffee reached a record €15.4 ($16.5) per kilogram, compared to €8.8 ($9.5) in 2020.

Climate Change and Supply Chain Disruptions

One of the biggest reasons for rising coffee prices is climate change, which is reducing yields in the world’s two largest coffee-producing countries—Brazil and Vietnam. In 2024, these countries experienced extreme climate events, including droughts, followed by severe frosts in Brazil, and flooding in Vietnam. These disasters disrupted supply and pushed prices higher.

• In December 2024, Vietnam’s coffee exports fell by 39.5% compared to the same period in 2023, marking a decade-low figure.
• In Brazil, exports dropped by 7.4%.
• The wholesale price of Arabica coffee, which had fluctuated around €4.4 ($4.7) per kilogram for years, surged to a record €9.4 ($10.1) in February 2025.

Regulatory and Geopolitical Challenges

Environmental regulations are further exacerbating the crisis. A new EU law set to take effect in December 2025 will ban coffee imports from deforested lands, which will significantly reduce Brazil’s coffee supply to Europe. In anticipation, producers are stockpiling coffee, adding further instability to the supply chain.

Geopolitical tensions are another major driver of price increases. Houthi rebel attacks in the Red Sea have disrupted shipping routes, cutting cargo movement through the Suez Canal by 50%. This has slowed down coffee transportation, and rerouting ships through alternative pathways has raised costs even further.

Additionally, new U.S. trade tariffs are set to worsen the situation. Donald Trump’s administration has proposed a 25% tariff on coffee imports from Mexico, which could directly impact consumer prices. Given that Mexico is one of the largest coffee suppliers to the U.S., these tariffs will make imported coffee even more expensive.

Consumer Adaptation and the Future of Coffee

Despite rising prices, consumers are not cutting back on coffee consumption. However, many are seeking alternative solutions:

• Some coffee enthusiasts are now buying raw beans and roasting them at home, which is more economical in the long run.
• Coffee brewing methods that use fewer beans, such as French press and cold brew techniques, are gaining popularity.

Experts warn that coffee prices will rise another 25% by the end of 2025.

Conclusion

Coffee retailers have long relied on the assumption that consumers will continue purchasing coffee regardless of price increases, but more people are now looking for cheaper ways to sustain their caffeine habits. If this trend continues, the coffee industry will face significant transformations, as consumer habits, once changed, rarely revert to old patterns.

As a result, the coffee world is on the verge of expensive changes, and prices are unlikely to decrease anytime soon.

Source: Based on WashingtonPost.com materials.