Global Coffee Industry Faces Supply Crisis and Rising Prices in 2025

Introduction: A Turbulent Year for Coffee

The global coffee industry is experiencing one of its most challenging periods in recent history, with 2025 marking an unprecedented year for specialty coffee with record C prices. For millions of coffee drinkers worldwide, these market upheavals have significant implications beyond just the price of their morning brew. The convergence of supply chain disruptions, climate challenges, and shifting trade dynamics is reshaping how coffee is produced, traded, and consumed globally.

Supply Deficits Drive Market Volatility

The coffee market is facing severe supply constraints that are pushing prices to historic highs. The USDA predicts a global deficit in 2025/26 which will drive prices higher, whilst Brazil’s coffee exports fell by 21% in the first half of 2025, primarily due to 50% duties on shipments to the US. The situation is further complicated by a 25% increase in Arabica coffee prices since the start of 2025, placing significant pressure on roasters and retailers worldwide.

Natural disasters have also impacted production. The Gayo highland coffee plantation zone in Aceh has been severely affected by flash flooding, soil erosion, and landslides, where more than 90,000 ha of Sumatra Gayo arabica plantation are located. Despite these challenges, there are some positive signs: A report projected the 2026/27 Brazilian coffee crop to be between 71 and 74.4 million bags, with favourable October–November rainfall boosting Arabica flowering.

Climate Change and Long-Term Challenges

Due to the effects of climate change, the land suitable for coffee farming could shrink by 50% by 2050, according to research findings. This poses an existential threat to coffee production in traditional growing regions. Coffee growers are facing climate change, labour shortages and incomes below the poverty line, creating a perfect storm of challenges for the industry.

Industry Adaptation and Future Outlook

The coffee industry is responding to these pressures through innovation and diversification. One of the key changes at coffee events this year has been the trend towards non-coffee beverages and products, with matcha, plant milks, functional drink powders, and other alternatives having a significantly larger presence. Meanwhile, World Coffee Research has expanded its Innovea Global Coffee Breeding Network to include robusta alongside arabica, aiming to develop climate-resilient varieties.

Conclusion: What This Means for Coffee Lovers

As we move further into 2025 and beyond, coffee consumers should expect continued price increases and potential shifts in availability. Retail prices are likely to keep climbing in 2026, and the price volatility that defined 2025 will continue into the next year. However, ongoing innovations in breeding programmes, alternative production methods, and sustainable farming practices offer hope for the industry’s long-term resilience. For now, coffee remains accessible, but the challenges facing producers underscore the importance of supporting sustainable and equitable trade practices that can help secure the future of this beloved beverage.