Coffee Export Prices May Rise Further In 2025: FAO

(UrduPoint / Pakistan Point News / WAM - 15th Mar, 2025) ROME, 14th March, 2025 (WAM) – World coffee prices reached a multi-year high in 2024 - increasing 38.8% on the previous year’s average – mostly driven by inclement weather affecting key producing countries, the food and Agriculture Organisation of the United Nations (FAO) said today.

According to an FAO note on global coffee market trends, in December 2024, Arabica, the higher quality coffee favoured in the roast and ground coffee market, was selling at 58% up on a year ago, while Robusta, used mainly for instant coffee and blending, saw a price surge of 70% in real terms.

This marked a narrowing of the price differential between the two varieties for the first time since the mid-1990s.

FAO said that coffee export prices may rise further in 2025 if major growing regions experience further significant supply reductions.

Key factors behind the recent price increase include limited export quantities from Vietnam, reduced output in Indonesia, and adverse weather impacting coffee production in Brazil.

In Vietnam, prolonged dry weather caused a 20% drop in coffee production in the 2023/24, with exports falling by 10% for the second consecutive year. Similarly, in Indonesia, coffee production in 2023/24 declined by 16.5% year-on-year on the back of excessive rains in April-May 2023 that damaged coffee cherries.

Exports dropped by 23%.

In Brazil, dry and hot weather conditions prompted successive downward revisions to the 2023/24 production forecast, with official estimates shifting from an anticipated 5.5% year-on-year increase to a 1.6% decline.

“The high prices should provide incentives to invest more in technology and research and development in the coffee sector - which relies largely on smallholder farmers - to increase climate resilience,” said Boubaker Ben-Belhassen, Director of FAO’s Markets and Trade Division, adding that climate change is impacting coffee production in the longer term. FAO supports many of the coffee-producing countries to help farmers adopt climate-resilient techniques that also contribute to restoring biodiversity loss.

According to figures, Brazil and Vietnam together account for nearly 50% of world coffee production. Global coffee production amounts to over $20 billion annually. The value of total coffee trade is estimated at over $25 billion per year.
In 2023, world coffee production reached 11 million tonnes. In 2023, coffee export earnings accounted for 33.8% of total merchandise exports in Ethiopia, 22.6% in Burundi, and 15.4% in Uganda.
In 2023, the largest coffee importers were the European Union and the United States of America. The global coffee industry generates over $200 billion in annual revenues.