The Food and Agriculture Organization has warned that global coffee prices may see another surge in 2025 if key producing regions continue to experience supply constraints.
In a statement on its website, the United Nations food agency attributed the price increase to adverse weather conditions in major coffee-growing countries, including Vietnam, Indonesia, and Brazil.
According to FAO, global coffee prices reached a multi-year high in 2024, climbing by 38.8 percent compared to the previous year. The surge was primarily driven by extreme weather events that significantly reduced production in these regions.
“In Vietnam, prolonged dry conditions led to a 20 percent decline in coffee production for the 2023/24 season, marking the second consecutive year of a 10 percent drop in exports,” FAO stated.
Similarly, Indonesia faced a 16.5 percent decline in production due to heavy rains in April and May 2023, which damaged coffee cherries. As a result, exports from the country fell by 23 percent.
Brazil, the world’s largest coffee producer, also saw its output decline due to persistent hot and dry weather. Official projections, which initially anticipated a 5.5 percent increase in production, were later revised downward to reflect a 1.6 percent decline.
FAO further highlighted rising shipping costs as a contributing factor to the increase in coffee prices.
The higher global prices have already impacted consumers, with FAO noting that coffee prices in December 2024 were 6.6 percent higher in the United States and 3.75 percent higher in the European Union compared to the same period in 2023.
Despite the challenges, FAO’s Director of Markets and Trade Division, Boubaker Ben-Belhassen, emphasized that the price surge could serve as an incentive for investment in climate-resilient agricultural practices.
“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,” Ben-Belhassen stated.
He further stressed the long-term impact of climate change on coffee production, noting that FAO is actively supporting coffee-producing nations in adopting sustainable techniques.
“FAO supports many of the coffee-producing countries to help farmers adopt climate-resilient techniques that also contribute to restoring biodiversity loss,” he said.
