Coffee export prices may rise further globally this year: FAO

World coffee prices reached a multi-year high in 2024 - increasing 38.8 per cent 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 percent up on a year ago, while Robusta, used mainly for instant coffee and blending, saw a price surge of 70 per cent in real terms.

This marked a narrowing of the price dif- ferential 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 per cent drop in coffee production in the 2023/24, with exports falling by IO per cent for the second consecutive year. Similarly, in Indo- nesia, coffee production in 2023/24 declined by 16.5 per cent year-on-year on the back of excessive rains in April-May 2023 that damaged coffee cherries. Exports dropped by 23 per cent.

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 per cent year-on-year increase to a 1.68 decline.