Coffee Prices Soar Globally as Trade Faces Sharp Slowdown
Reuters has confirmed that the global coffee industry is experiencing a sharp slowdown, as traders and roasters reduce their purchases to the lowest levels due to a significant surge in prices. The agency reported that Arabica coffee futures on the exchange have jumped by 70% since November, making it difficult for suppliers to convince retailers to accept these increases.
The agency quoted Renan Chueiri, General Manager of ELCAFE in Ecuador, as saying that 2025 is the first year in which the instant coffee producer has been unable to sell its entire annual production by March.
“Usually, by this time, we would have sold all our production, but so far, we have only sold 30%,” Chueiri said. “The significant price increase affects clients’ cash flow, as they do not have enough liquidity to buy what they need.”
In the United States, a senior coffee roaster, who requested anonymity, said that some of his clients are unsure whether they will be able to stay in business.
“Some will not be able to survive,” the CEO said. “Retailers are delaying negotiations, and some stores are already facing coffee shortages on their shelves.”
According to Reuters, fears over continued high prices have led traders to adopt a more cautious approach to purchasing.
“No one wants to take risks, and no one is buying for future delivery—everyone is purchasing only the necessary quantities,” said a coffee broker who requested anonymity.
In Brazil, the world’s largest coffee producer, purchasing has become more cautious than ever before.
“Deals are being completed with seven-day payment terms. Buyers go to farms or warehouses, check the quality, and if it meets their standards, they pay immediately and take the coffee with them,” the broker explained.
Reuters confirmed that the impact of reduced trade volumes has started to appear in U.S. warehouses near major ports, where inventory levels have dropped to half their usual levels.
A senior official from one of the largest storage companies revealed that some firms have begun returning silos to their owners and terminating lease contracts early due to decreased demand.
Despite the crisis, Reuters’ latest poll predicts that Arabica coffee prices could drop by up to 30% by the end of the year, as high prices lead to lower demand, while projections indicate a strong harvest in Brazil next year, which could help ease market pressures.
During the Houston conference, Louis Dreyfus presented data showing that coffee cultivation areas are expanding in response to higher prices, particularly in India, Uganda, Ethiopia, and Brazil. If Brazil manages to produce a large crop, it could lead to a sharp decline in prices.
With continued uncertainty, the global coffee industry faces major challenges. With buyers hesitant, retailers resisting price hikes, and financial pressures mounting on all parties, the coming months are expected to be difficult for traders, roasters, and consumers alike.
