The recent spike in the C price has certainly sparked conversation, and I see this as a positive shift. A few years ago, the specialty coffee industry felt more disconnected from the fluctuations in the New York exchange. Today, it’s encouraging to see roasters and industry professionals staying informed and using this knowledge to guide their decisions.
The rise in prices is primarily driven by climate-related challenges that continue to disrupt coffee production globally, impacting all major producing countries. In Brazil, the recent rainy season, followed by the critical flowering period, has revealed a troubling trend: reports indicate a significant drop in flowering on coffee trees, suggesting a likely decline in the 2025 harvest.
You can certainly point to other factors influencing prices, such as hedge fund speculation, EUDR uncertainty, and geopolitical tensions. However, as someone from a coffee-producing family in Brazil, my insights are most aligned with the production side of the equation.
This year, Brazil’s challenges have gone beyond insufficient rainfall. Rising temperatures have proven equally, if not more, damaging. Even farms with irrigation systems have struggled, as extreme heat can harm proper coffee bean development.
From a climate perspective, I believe prices are likely to remain high. While predicting the market is always tricky, my 15 years of experience suggest that volatility is a constant. However, I don’t see prices dropping significantly anytime soon.
Looking ahead, as winter sets in across the Northern Hemisphere, coffee consumption typically rises. Simultaneously, Brazilian growers are holding onto their stock, with only about 20% of the 2024 harvest still in producers’ hands. This tightening supply will likely keep prices elevated until either Brazil or Vietnam delivers a strong harvest.
Adding to this dynamic is increasing demand from emerging markets without a strong coffee tradition. For instance, Chinese company and coffeehouse chain, Luckin Coffee, recently signed a $1.4 billion agreement to purchase an additional 120,000 tons of Brazilian coffee between 2025 and 2029, which will further influence global supply and pricing.
That said, two factors could potentially ease prices:
- A decrease in consumption due to higher prices—though this will likely take time to materialize.
- Increased supply—as higher prices incentivize more production. However, given the current climate challenges, scaling production will take years to make a real impact.
It is very import to mention though that higher prices alone won’t solve anything. It’s crucial for roasters to consider where and how they source their coffee. Working with suppliers who have direct and transparent connections to origin can make a meaningful difference.
An area that deserves more attention is supply chain distribution. In Brazil, many farmers now have the autonomy and technology to sell processed coffee, adding value before it reaches the export market. This enables Brazilian farmers to benefit more directly from price spikes. Unfortunately, this isn’t the case everywhere. In many countries, producers sell coffee as cherries, relying on multiple intermediaries before reaching roasters. This dilutes the value they can capture.
Even in Brazil, the situation is far from straightforward. A smaller harvest and a strong USD against the BRL mean that farmers face higher costs for production inputs, often priced in USD. As we often say as producers in Brazil: “What’s the point of higher coffee prices if you don’t have coffee to sell?”
I’m also concerned about the disincentive for farmers to produce specialty coffee. When roasters prioritize cheaper options, the premium for specialty coffee shrinks, discouraging farmers from investing in quality. If commercial coffee prices remain high, it becomes harder to justify the additional effort and cost of specialty production.
The old narratives for specialty coffee—of it being shielded from market forces—are increasingly outdated. The NY C price profoundly influences what we pay for coffee, even specialty lots. Acknowledging this reality is essential for roasters to adjust to market fluctuations, including the need for more frequent price reviews.
Paying prices entirely disconnected from the exchange would require significantly higher premiums. But realistically, are roasters ready to pay those prices and the consumers ready to receive them?
The price spikes of 2022 and 2024 have shown me otherwise. It’s clear that pointing fingers or oversimplifying the issues won’t drive progress. Instead, we should focus on staying informed, embracing transparency, and sourcing insights from origin professionals who are closely tracking what’s happening on the ground.
I’d love to hear your thoughts and continue this conversation. Feel free to get in touch with your comments or questions.
Written by: Bruna Costa
