World coffee prices surged to a multi-year high in 2024, driven largely by adverse weather conditions impacting key coffee-producing countries. The Food and Agriculture Organization of the United Nations (FAO) reported a significant increase of 38.8 percent in coffee prices compared to the previous year. In December 2024, Arabica and Robusta coffee varieties experienced price spikes of 58 percent and 70 percent, respectively, in real terms. This marked a notable convergence in prices between the two types for the first time since the mid-1990s.
The rise in coffee prices was attributed to various factors, including supply disruptions in major coffee-growing regions such as Viet Nam, Indonesia, and Brazil. Viet Nam witnessed a 20 percent decline in coffee production due to prolonged dry weather, leading to a consecutive drop in exports. Similarly, Indonesia experienced a 16.5 percent decrease in coffee production following excessive rains that damaged coffee cherries. In Brazil, dry and hot weather conditions resulted in a downward revision of the production forecast for 2023/24.
Aside from weather-related challenges, higher shipping costs also played a role in driving up world coffee prices. Consumers in the United States and the European Union were reported to be paying more for coffee in December 2024 compared to the previous year. The price surge is expected to continue into 2025 if major coffee-producing regions continue to face supply constraints.
Boubaker Ben-Belhassen, Director of FAO’s Markets and Trade Division, emphasized the need for increased investment in technology and research to enhance climate resilience in the coffee sector, which heavily relies on smallholder farmers. FAO supports coffee-producing countries in adopting climate-resilient practices to mitigate the long-term impacts of climate change on coffee production and biodiversity loss.
With smallholder farmers contributing significantly to global coffee production, market transparency and collaboration across the value chain are essential to ensure sustainable growth in the industry and safeguard the livelihoods of millions of coffee producers worldwide. Brazil and Viet Nam collectively represent nearly half of the world’s coffee production, with smallholder farmers playing a crucial role in the industry.
The global coffee industry, valued at over $200 billion annually, faces challenges posed by fluctuating weather patterns and market dynamics. FAO’s efforts to support climate-resilient practices and promote cooperation among industry stakeholders are crucial in securing the future of coffee production and sustaining livelihoods in the sector.
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