What’s Behind the Rising Coffee Prices in 2025 And Why East Africa Might Be the Biggest Beneficiary
Will your daily cup of coffee get more expensive in 2025? Industry experts warn that prices are set to rise, with some predicting that a single cup could cost as much as $10-$12 in the near future.
The wholesale price of coffee beans hit record highs in December, and there’s little sign of prices falling anytime soon. But what exactly is driving these increases? Here are the key factors.
1. Climate Challenges
One of the most significant contributors to rising coffee prices is the impact of climate change. Coffee plants thrive in regions with defined wet and dry seasons, but erratic weather patterns have disrupted this balance.
A serious drought in Brazil has ravaged the coffee flowers. Photo by Guy Carvalho.
Droughts in major coffee-producing countries like Brazil and Vietnam—the world’s largest suppliers—have led to reduced yields. According to the U.S. Department of Agriculture, around 57 percent of the world’s coffee production last year came from arabica beans, and Brazil is the largest exporter.
These disruptions not only affect current supplies but also create uncertainty for future harvests.
2. Supply Chain Disruptions
Global supply chain issues are compounding the problem. Rising container freight costs, driven by geopolitical tensions and port congestion, have made it more expensive to transport coffee beans. Countries that rely heavily on imports, such as Australia and the United States, are particularly affected. Domestic supply chain challenges, such as labor shortages and industrial action, further escalate costs.
3. Growing Demand
Global coffee consumption continues to rise, outpacing supply. The increasing popularity of specialty coffees, particularly in markets like the United States, Europe, and Asia, has intensified demand for arabica beans, which are more expensive and harder to grow than robusta. This demand-supply imbalance is pushing prices upward.
4. Shift Toward Robusta
As arabica prices soar, many retailers and consumers are turning to robusta as a more affordable alternative. However, the price of robusta beans nearly doubled in 2024 due to increased demand. The rising cost of robusta further tightens the global coffee market, leaving little room for price relief.
The main coffee-growing areas in Kenya are the high plateau, high elevation areas of the country. Image: Hamakua Wild Coffee
5. Labor Costs and Local Factors
Labor costs in coffee-growing regions and importing countries add another layer of expense. In countries like Australia, local coffee production accounts for less than 1% of the market due to high labor costs. Retailers must factor in these expenses, along with the rising cost of living, when setting prices.
6. Consolidation of Supply
The global coffee supply has become concentrated in a few key regions. This consolidation increases vulnerability to disruptions in major producing countries. A single climate or geopolitical event in a country like Brazil can have far-reaching impacts on the global market, driving prices higher.
Solutions on the Horizon?
Experts suggest diversifying coffee production to include emerging suppliers like Indonesia, Kenya, and India. Investing in sustainable farming practices and agricultural science could also help stabilize the global coffee supply in the long term. While these measures are promising, they will take time to implement.
How Much Will You Pay for a Cup?
Although a $10 coffee might seem sensational, small price increases are likely. Many cafes are raising prices gradually, reflecting rising costs across the supply chain. For now, your morning brew may cost a bit more, but it’s unlikely to break the bank overnight.
The Bigger Picture
The rising cost of coffee is a complex issue influenced by climate, logistics, and market dynamics. While challenges persist, ongoing innovation and investment in the coffee industry offer hope for more stable pricing in the future. For now, coffee lovers may need to budget a little extra to keep their caffeine fix going strong.