- Sustained high green coffee prices have been a defining factor of the coffee industry in 2025.
- In early February, arabica futures surged to their highest-ever levels, reaching US$4.41/lb, and came close to this figure again in mid-September.
- Although price volatility is nothing new, the current situation is different. Instead of the dramatic yet predictable peaks and troughs, prices have remained consistently high, creating a new set of challenges for both roasters and producers.
- Climate change, political instability, tariffs, and global economic pressures are all adding more layers of complexity, prompting industry professionals to question what lies ahead for 2026 and beyond.
The coffee industry continues to be in the thick of a significant adjustment. Green coffee prices have remained consistently high for an extended period, and all signs point to this becoming the “new normal” for producers, traders, roasters, and consumers.
Price volatility is not a new phenomenon in coffee, but for the first time in decades, the C price has consistently remained above US$3/lb since April 2024. This new price reality is forcing both roasters and producers to adapt in unprecedented ways, reshaping immediate strategies and relationships across the supply chain.
However, there are broader, long-term implications that also need to be considered, begging the question: What’s in store for the coffee industry in 2026?
I spoke to James Gibbs at Red Fox Coffee Merchants, Luke Waite at Pomelo Coffee Consulting, and Carley Garner at DeCarley Trading to find out more.
You may also likeour article on how high coffee prices changed the meaning of direct trade.
What’s causing such high coffee prices?
Over the last five or so years, we have seen multiple events that have had an impact on the coffee market, adding layers of unpredictability and volatility.
The global pandemic, shortly followed by the Suez Canal blockage, had huge knock-on effects on the global flow of coffee, disrupting business as usual and temporarily rerouting shipments.
More recently, US tariffs, unfavourable weather conditions in Brazil and Vietnam, and delays at Ethiopian ports have all contributed to the fluctuations in the C market price. Commodity brokers and speculative investors, sensing opportunity in this scarcity, have increasingly bet on continued price appreciation, further accelerating market volatility.
“One US dollar goes about a third as far as it used to just a couple of years ago,” says James, the senior North American accounts manager and sales at Red Fox Coffee Merchants. “Each and every contract has to be considered more critically than ever.”
Market uncertainty has created a fundamental shift in trade dynamics, altering the power balance within the coffee industry and creating tensions where previously established patterns existed.
Roasters, who historically thrived during periods of low C prices by securing more comfortable margins, now find themselves in unfamiliar territory. Their cash flows have become increasingly constrained as capital requirements for purchasing green coffee have soared in recent years.
Many businesses built on models that assumed specific price ranges are now questioning their sustainability, forcing difficult decisions about pricing and sourcing strategies.
“We prioritised our longest-term, most successful producer relationships above those that were less stable,” James explains. “We’ve built our business on the concept of delivering quality coffee exactly as expected in a timely manner, which means becoming even more meticulous in our process from dry mill through delivery.
“Quality can’t be wrong in moments like these,” he adds. “Thanks to two-way communication and long-term relationships built on trust, producers we work with have continued to prioritise coffee quality in their deliveries.”
The immediate effects of rising prices
Sustained high arabica prices have created an unprecedented time for the coffee industry.
Everyone across the supply chain is feeling the effects. While roasters and traders grapple with tighter margins and cash flow crises, producers face difficult decisions about where to sell their coffee. Some are declining long-term contracts to sell at higher prices, hoping to reinvest in their farms.
For producers specifically, there’s a narrative that higher prices mean higher profits, but the reality is more complex. Unpredictable weather, rising fertiliser costs, and labour shortages all add pressure to farmers’ operations. Additionally, buyers are more cagey, so more options don’t necessarily equate to a better position for producers.
One of the biggest concerns with sustained high green coffee prices is how they impact the end consumer. Many roasters are hesitant to adjust their retail prices with fears that their customer base will look elsewhere for more affordable options.
“Coffee price increases haven’t affected my business directly; however, they have dramatically changed the landscape of my clients’ businesses,” says Luke, the founder of Pomelo Coffee Consulting.
Roasters are known to work with incredibly slim revenue margins, meaning that any rise in costs, especially for their core products, can have a resounding effect on overall business operations.
“On the consuming side of the industry, the immediate and ongoing challenge is navigating dramatic green coffee price swings and US tariffs,” Luke explains. “Historically, many coffee roasters haven’t had a firm grasp on their unit economics because they didn’t need to be as conscious of their own pricing.
“Now, with significant increases in green coffee costs and other business expenses, they no longer have the luxury of ‘waiting and seeing’,” he adds.
Following trends in other markets that have experienced similar price shocks, consumers initially absorb increases. However, as prices remain high or continue to rise, they inevitably adjust their behaviour to cope with the elevated costs.
Eggs in the US market are a prime example. The average price for a carton of eggs has soared from US$1.49 in 2018 to US$5.18 in 2025. In response, over a third of US consumers said they have stopped buying eggs, and won’t begin to purchase them again until the price drops below US$5.
Changing coffee consumer behaviour could include buying less of the brands they typically purchase, switching to cheaper alternatives or private label products, or stopping the purchase of these goods altogether.
The broader, long-term implications for the coffee industry
Price volatility is nothing new in coffee, but the current situation is different. Instead of the dramatic yet predictable patterns of peaks and troughs we’ve seen over the last few decades, coffee prices have remained consistently high for the past couple of years.
Ultimately, all signs point to the start of a “new era” for coffee: One where high, volatile prices are becoming a reality that roasters and traders can’t afford to avoid. Simultaneously, not all producers are benefitting.
“We work closely with commodity producers and end-users to manage their price risk, but we didn’t receive many inquiries from people in the coffee supply chain until market volatility increased in late 2024,” says Carley, a senior commodity strategist and broker at DeCarley Trading.
“Human nature is to seek price risk management after most of the damage has been done, and we have seen this play out in real time. In late 2024, coffee buyers were contacting us for help, but when coffee futures traded under US$3/lb, it was the producers who were seeking assistance,” she adds. “Commodity markets are treacherous for both sides of the trade; the only difference is timing.”
According to a Reuters poll earlier this year, market analysts anticipated arabica futures would fall by as much as 30% by the end of 2025. illycaffè CEO Cristina Scocchia also projected that arabica futures would stabilise between US$2.50 and US$3/lb by late 2026, predicting higher production volumes in Brazil and declining global demand.
Others, however, remain sceptical. Many producers and traders point to a worsening climate crisis as the primary driver of supply shortages, meaning there may be little respite ahead.
Brazil’s National Supply Company recently lowered its prediction for 2025 arabica estimates by 5% following droughts and off-cycle weakness, indicating that prices will remain high for the foreseeable future.
Colombia, meanwhile, reportedly had its most productive coffee harvest in over three decades, producing close to 15 million 60kg bags, an increase of 17% on the prior cycle. However, given that US President Trump has threatened to raise tariffs on the country as his drug trade feud with President Pietro escalates, C price volatility is likely to continue.
Despite some hope that coffee would be exempt from trade levies, many producing countries continue to face steep tariffs, including 50% on Brazilian imports.
What could happen in 2026?
As the economic gap between commercial and specialty-grade coffees narrows, it presents an opportunity for specialty coffee roasters and brands to capture a larger market share.
With smaller, incremental hikes, such as US 25 or 50 cents per cup, downsizing retail bags, or offering accessible blends and cost-effective single origins, specialty coffee roasters and shops can now effectively showcase a clear value proposition of quality.
But to maintain this point of differentiation and manage tight margins, many roasters are also increasing their prices, potentially reducing the demand for specialty coffee.
Simultaneously, when the C price is high, there’s less incentive for producers to grow specialty coffee. Growing and processing higher-quality coffee is inevitably more expensive and requires more labour, so with a high C price, it then becomes more profitable to grow commercial-grade coffee.
It’s a vicious cycle, however. As the production of commercial-grade coffee increases, market prices will start to fall, and specialty coffee will become more lucrative.
“I can’t speak directly for producers, but I can chime in on what I generally see from commodity producers after a few years of unusually favourable pricing,” Carley says. “There is a natural gravitation toward unawareness, which often leads to unintentional and underappreciated business risks.
“Furthermore, commodity markets of all types have a nasty habit of undergoing feast or famine cycles; prices are always temporary, but it is difficult for industry to accept and cope with that reality,” she adds.
In a volatile market, with no guarantees and limited access to finance, coffee farmers can strategically default on contracts to secure higher prices aligned with market movements, potentially creating tension with existing buyers.
Additionally, producers are likely to want to fix futures contracts at current prices for the long term, whereas buyers are less likely to commit, which shifts trade dynamics and adds strain to working relationships.
US tariffs underscore just how volatile the situation is, highlighting how prices could swing at any moment.
With the fallout from the C-market price surge still being assessed and discussions about future coffee price increases, investing in trusted, long-term, and valuable partnerships has never been more critical.
“We’re seeing a very strategic use of additional profits to improve quality and make sure that the current upturn creates opportunities for long-term continued growth,” James says. “For instance, many producers are currently replanting with varieties that maximise quality, while others are investing in improvements to their washing and drying stations.
“Another unexpected benefit we’re seeing is that the high C market has encouraged younger generations to reinvest in coffee production as a profitable career avenue rather than leaving for the cities,” he adds.
The coffee industry has proved its resilience, navigating a number of challenges over the last few decades. But with no signs of the market slowing down anytime soon, producers, roasters, traders, and consumers all need to adjust for the foreseeable future.
The key point is to plan ahead with a clear, strategic philosophy, anticipating that coffee prices could easily rise again or sharply drop in the near future.
Enjoyed this? Then readour article on how high prices blurred the divide between commercial and specialty coffees.
Perfect Daily Grind
Want to read more articles like this?Sign up for our newsletter!
The post Coffee prices are higher now – so what’s next? appeared first on Perfect Daily Grind.
