The global coffee industry is facing an unprecedented challenge. This week, the C-Market price of coffee hit an almost 50-year high, reaching 335.19c USD at the time of writing.
For UK businesses with a coffee offering, this sharp rise presents significant hurdles, affecting everything from sourcing and pricing to how coffee is served on the high street.
What Is the C-Market Price?
The C-Market price is the benchmark for the globally traded value of raw, green coffee beans. Much like stock market prices, it reflects the cost at which coffee is bought and sold between farmers, importers, and roasters. It sets the baseline for coffee pricing worldwide.
Max Devenish, Commercial Director here at Bridge Coffee Roasters, explains:
“When the C-Market price of coffee goes up, it affects the price at which the vast majority of coffee is bought and sold around the globe. Coffee roaster have seen significant rises in their costs over the last 30 days due to the soaring C-Market figure, and there is only so much of this cost roasters can absorb.”
Factors such as weather events, currency fluctuations, and market speculation heavily influence the C-Market price.
“Additionally, since the US election, the value of the US dollar has strengthened against the pound. As the C-Market price of coffee is measured in US dollars, the UK and other consuming countries around the world may be hit even harder” Max states.
What’s Driving the Surge in Coffee Prices?
At the heart of the issue is climate disruption.
Brazil, the largest producer of arabica coffee, has been hit by severe drought conditions during this year’s growing season.. This has resulted in reduced soil moisture levels, threatening next year’s crop, as flowers may fail to develop into cherries.
“Brazil accounts for around 60% of the global coffee supply.” Max states. “This year, a very dry growing season has reduced expected production by three million sacks. Combine this with geopolitical pressures and the strengthening US dollar, and we’re seeing unprecedented changes in the market.”
Adding to the pressure, Vietnam, the top robusta producer, is experiencing delays in its harvest caused by heavy rains. The compounded effect is a tightening of global coffee supply, which has triggered significant price increases.
A Coffee Trader Weighs In
Henry Clifford, Senior Coffee Trader at DR Wakefield, provided comments on the market dynamics behind the price surge:
“Speculative trading is intensifying the problem, with market observers predicting that prices could climb as high as 350 USC/lb in the short term. However, a correction is expected once the market peaks, although prices are unlikely to drop below 280 USC/lb in the medium term.”
March arabica coffee rose 14.20 cents, or 4.6%, to 323.05 USC/lb, having touched highs not seen since the late 1970s during the recession.
Brazilian farmers, who produce nearly half the world’s arabica coffee, are holding back on selling next year’s crop, anticipating even higher prices. This has caused a knock-on effect in the trading ecosystem.
Farmers in Brazil, who grow almost half the world’s arabica, have sold up to 70% of the current crop and are in no rush to sell forward next year’s crop, betting on even higher prices.
Additionally, rising hedging costs and fears of delivery delays are forcing traders to buy back futures, further driving prices up.
Source: StoneX https://www.stonex.com/en/market-intelligence/coffee-market/
The View from the Roastery
Words by our Roastery Production Manager
“The coffee industry is bracing for a storm unlike anything we’ve seen in recent years. El Niño is hitting crops hard, production costs are skyrocketing, and supply routes are more disrupted than ever. Farmers are seizing the moment, becoming price makers as global stock levels tighten. Importers, meanwhile, are squeezed between higher costs at origin and roasters hesitating to commit to long-term contracts.
As roasters, we’re facing tough choices. Contract now and risk locking in peak prices? Or hold back and gamble on even tighter supply? Meanwhile, green coffee prices continue climbing, and quality lots are becoming harder to secure. Flexibility is key, but so is building stronger, more transparent relationships with importers and farmers.
This isn’t just a short-term ripple – it’s a fundamental shift in the dynamics of our supply chain. The next 12 months will be critical as we navigate these challenges and rethink how we approach sourcing, blending, and sustainability.
One thing is clear: collaboration and adaptability will define who comes out stronger on the other side.”
– Marcus Goucher
What This Means for UK Businesses
The recent surge in coffee prices will likely create significant challenges for UK businesses that rely on coffee as a core part of their offering. Coffee roasters are facing rising costs for green coffee, with an average £1.50 per kilogram increase over the past month.
Many roasters are exploring ways to adapt, which may include adjustments to blend compositions and sourcing alternatives to maintain consistency and quality.
For cafés and hospitality businesses, these changes could mean needing to raise the price of drinks to account for higher supply costs. At the same time, customers are becoming more discerning, so maintaining quality and clearly communicating value will be essential.
Businesses may also look at improving operational efficiency or enhancing their coffee menus to justify premium pricing while keeping customers engaged.
While these pressures are significant, collaboration across the supply chain and strategic adjustments can help businesses weather this storm.
By focusing on efficiency, innovation, and customer experience, UK businesses can adapt to market shifts while maintaining the high standards their customers expect.
How Will this Affect Coffee Drinkers?
For high street coffee drinkers, the impact of these rising prices will soon become noticeable.
Paying over £4 for your daily flat white is no longer an astonishing cost to many coffee drinkers, and with green coffee prices climbing and operational costs rising across the supply chain, businesses have limited options but to adjust their pricing even further.
Max anticipates that consumers will bear some of this burden:
“High street coffee prices will rise not just because of the C-Market price but also due to increased costs of living across the supply chain, including changes to wages and national insurance contributions.”
While businesses are doing their best to absorb these rising costs, customers should expect to see gradual increases in the price of their daily coffee over the coming months.
Is There a Silver Lining?
Amid the challenges, there is a potential positive outcome: better incomes for coffee farmers.
Historically, farmers have received the smallest share of revenue within the coffee supply chain. The current rise in prices could help address this imbalance.
Max remains optimistic:
“The farmers, who work hardest in the supply chain, may now see a larger portion of the profits stay at origin. This is a positive step for sustainability and fairness in the industry.”
What we’ll be doing to help
At Bridge Coffee Roasters, we are committed to helping our partners navigate these turbulent times. By fostering strong relationships with importers and farmers, we are working to secure the quality coffee you need while helping you adapt to changes in pricing and supply.
Whether it’s rethinking blends, exploring sustainable sourcing options, or providing guidance on pricing strategies, we’re here to support your business and help you thrive despite the challenges.
If you’d like to discuss how we can help, please don’t hesitate to reach out.