Worldwide coffee production peaked at 177 million 60 kg bags in 2020, then decreased by 7% in the next two years and in 2023 recovered to 168 million 60 kg bags and in 2024 to 175 million. Adverse weather, particularly in major coffee-producing countries like Brazil and Vietnam, negatively impacted coffee crops, reduced yields and have led to lower quality beans. Amid this backdrop, global coffee consumption continues to rise, causing a supply and demand imbalance that is driving up coffee prices. In the span of a year, green coffee bean prices shot up 130% to USD 4.38 per pound. Next to weather curbing supply, higher costs for fertilizers, labor, and transportation are also contributing to higher coffee prices. Additionally, the increasing demand for sustainable and ethical coffee production, which often involves higher costs also contributes to higher prices. A sudden increase in supply in reaction to higher prices is impossible, as coffee trees take three to four years to mature and reach peak production after five to seven years, but industry reports do suggest coffee tree planting has increased.
Source: US Department of Agriculture, February 2025.