Why Are Coffee Prices Going Up in 2025 (At Least, Expected To)?

Key Takeaways

• Weather extremes are shrinking coffee harvests: Droughts and frosts in Brazil and heavy rains in Vietnam have severely impacted global coffee production, driving prices higher.

• Rising demand meets supply chain challenges: Coffee consumption is growing worldwide, but higher fuel costs, labor shortages, and disrupted shipping are making coffee more expensive to deliver.

• Fair trade coffee offers a solution: Supporting fair trade brands helps ensure farmers earn fair wages, promotes sustainability, and may even help to stabilize coffee production over time.

Coffee prices are climbing higher than a latte foam swirl these days, and 2025 isn’t shaping up to bring much relief. Whether you’re sipping your morning brew at home or grabbing a cup at your favorite coffee shop, the cost of coffee has been inching upward – and it’s not just about inflation.

In December 2024, Arabica coffee prices surged by 13%, marking a year-over-year increase of over 60% according to the World Bank Group. Coffee lovers everywhere are feeling the squeeze, but why exactly is this happening?

What’s Driving the Spike in Coffee Prices?

How Weather Impacts Coffee Prices

If you thought your morning cup just magically appeared, think again.

The journey of coffee beans starts on farms that are deeply tied to Mother Nature’s mood swings. Brazil – the superstar of Arabica coffee production – has been grappling with an early summer drought followed by unexpected frosts. These weather conditions have sent ripples through the supply of raw Arabica coffee beans, causing prices to hit record highs. Meanwhile, Vietnam, the world’s second-largest producer and a major exporter of robusta beans, has dealt with heavy rains that have slowed coffee production to a crawl.

Supply Chain Snags and Coffee Costs

Even when the coffee trees manage to survive bad weather, getting those beans from the farm to your cup is a whole other challenge. Higher fuel costs, labor shortages, and disrupted shipping routes have made moving coffee more expensive at every stage of the process. This shaky supply chain is raising fears of further price hikes and forcing coffee traders to pass higher costs onto consumers. Coffee stocks are dwindling, and holding coffee stocks is becoming increasingly challenging for producers and traders alike.

Global Demand Pressures

The love affair with coffee isn’t just an American thing anymore – it’s going global. Emerging markets like China and India are developing a serious taste for coffee, while the usual suspects (Europe and North America) continue their steady rise in consumption. This growing global thirst is adding to the strain on already tight coffee stocks and forcing some coffee producers to raise prices just to keep up.

Current Coffee Prices: The 2025 Breakdown

Commodity Prices: Arabica vs. Robusta

Arabica coffee prices have been climbing the charts, with raw Arabica coffee prices recently hitting over $2 per pound. Robusta beans, often used in instant coffee, have also seen a significant bump, now hovering at their highest prices in years. Coffee traders are predicting more hikes, making the future of coffee prices look anything but mellow. In fact, hitting record high prices has become the norm for both popular caffeinated crops.

What Consumers Can Expect

If you’ve noticed your favorite coffee shop quietly raising its prices or that grocery store coffee brands are suddenly pricier, you’re not alone.

The ripple effect of these commodity price hikes is landing squarely on your wallet. Expect higher prices at checkout and a bigger hit for specialty coffee lovers. Starbucks CEO speaks often about how these price increases are affecting global production and day-to-day operations, as coffee prices rise, the coffee industry is mostly passing that along.

At Philly Fair Trade, our goal is to pay farmers a fair price for their coffee (we love working directly with growers when we can), AND provide a fairly priced bag of arabica beans to our customers!

The Impact on Farmers and Coffee Drinkers

Farmers Facing Tough Times

Coffee farmers, especially those in regions like Brazil and Vietnam, are struggling to adapt to the challenges of bad weather and fluctuating coffee prices. Many farmers are turning to sustainable methods or working with cooperatives like the Oromia Coffee Farmers Cooperative to weather these storms. But for now, the uncertainty is creating a tough environment for producers, especially in South American producing regions.

Coffee Lovers Feeling the Pinch

Whether you’re brewing at home or grabbing a cappuccino at your local café, the steady rise in prices is impossible to ignore.

And it’s not just about coffee – milk, syrups, and other add-ons are also getting pricier, making every cup a little harder on your budget. Price hikes are being felt everywhere, as coffee shops are left with no choice but to pass along higher costs.

Coffee prices are rising primarily due to a combination of extreme weather events like droughts and flooding in key coffee-producing regions, particularly in Brazil and Vietnam, which have significantly reduced the global coffee bean supply while demand continues to increase, often attributed to climate change; this has led to near 50-year high prices for coffee beans. 

Are High Coffee Prices Here to Stay?

The million-dollar question: will prices level out, or are we stuck with these higher costs?

Commodity experts suggest that while some stabilization may happen after the year’s harvest, ongoing challenges like high temperatures and supply chain issues mean coffee prices may not drop anytime soon. Investment in sustainable farming and more efficient commodity strategies are being explored, but those solutions take time to bear fruit. Meanwhile, many farmers are bracing for the fifth consecutive year of difficult conditions.

How Fair Trade Coffee Can Help

Supporting fair trade coffee brands is one way consumers can make a difference. By buying fair trade or directly sourced coffee, you’re helping farmers earn a fair wage and invest in sustainable practices that could stabilize coffee production in the long run.

And while fair trade coffee often comes with a slightly higher price tag, it’s a small price to pay for better working conditions and a healthier planet.

A Final Sip of Perspective

From bad weather in South American producing regions to a global supply chain caught in a tangle, coffee prices are being pushed higher by a perfect storm of factors. But there’s hope in supporting initiatives like fair trade coffee, which can help soften the blow for farmers and consumers alike.

Want to learn more? Check out this quick video that dives deeper into the forces shaping coffee prices in 2025:

Coffee prices expected to rise in 2025

Ready to make an impact? Explore Philly Fair Trade’s ethically sourced coffee options today and sip your way to a more sustainable coffee future!