The world has woken up to a coffee shock. The planet’s most consumed beverage, after water, saw its price surge by 94.6% in one year, according to ICO data. On the streets of New York, small cafés are shutting down, unable to absorb costs.

The ICO confirmed that global reserves are at their lowest since 1977, a situation worsened by climate and geopolitical factors. Brazil, responsible for 40% of global production, faced its worst drought in 50 years. In Vietnam, the second-largest exporter, the 2024 harvest fell by 27.5%, tightening the robusta market.

“We are in a cycle of restricted supply and inelastic demand”, the ICO stated in a press release.

The European Union, meanwhile, froze 30% of imports by demanding sustainability certifications, a measure that triggered panic buying. In the US, tariffs on Colombian coffee sparked chaos on Wall Street.

In Africa, exports rose by 7.1%, but infrastructure gaps limit growth. In Angola, the price of imported coffee surged by 80%, reflecting global tensions.

“African coffee is resilient but undervalued”, highlighted the fao.

The surge began in November 2024, when arabica futures rose 70% on the New York exchange. Droughts in Brazil and frosts in Vietnam slashed global supply by 18%. Financial speculation worsened the scenario. In February, the ICE (Intercontinental Exchange) raised margin requirements for futures contracts, forcing investors to liquidate positions.

“Many small operators left the market, concentrating power in the hands of large players”.

Explained Michael Von Luehrte, broker at MVLcoffee. US trade policies added fuel to the fire. Tariffs on Colombian coffee, announced in January, destabilised supply chains.

“It’s a perfect storm: climate, politics, and greed”.

Summarised Renan Chueiri, director of ELCAFE C.A. in Ecuador. The EU, meanwhile, froze 30% of imports by demanding sustainability certifications. The measure, suspended in March, had already triggered panic buying.

In producer countries, bankruptcies like Atlântica Exportação (Brazil) created bottlenecks. Banks cut credit lines, and without liquidity, there is no way to buy coffee from farmers. Consumption, however, remains steady. In the US, the largest market, 64% of adults drink coffee daily.

“It’s an inelastic addiction: even when expensive, people won’t cut back”.

Stated the director-general of US roaster Onyx Coffee Lab.

Africa accounts for 12% of global production, with exports rising 7.1% in January. Countries like Uganda and Ethiopia lead growth, expanding cultivated areas to attract investors. However, the lack of efficient ports limits their potential.

“African coffee is resilient but undervalued”, highlighted the fao in a recent report.

In Angola, where coffee was once “black gold,” production is minimal. Yet, the price of imported coffee rose by 80% in Luanda. A lack of investment in the sector is critical, forcing shops to sell coffee below cost to retain customers.

Angolan farmers are pleading for technical support. Domingos Kiala of the Uíge Coffee Growers’ Association stressed the need for machinery and training to revive the sector. The Ministry of Agriculture promised a development plan, but critics accuse delays:

“They’ve talked for years—nothing happens.”

“Without technical support, small producers will be excluded”, warned the ngo coffee for Africa.

Elsewhere on the continent, infrastructure remains a challenge. In Zimbabwe, 40% of the harvest rots due to a lack of storage. The inability to process beans forces exports of inferior quality, according to ICO data. EU sustainability certifications exacerbate the issue. Only 5% of African coffee has certifications like “Fairtrade,” worsening trade barriers.

In the US, supermarkets resist applying price increases. The director-general of JavaGold admitted negotiations with roasters are “a real war.” At Houston’s National Coffee Conference, executives predicted mass bankruptcies:

“Those without capital will have no choice but to close.”

In Europe, German consumers launched boycotts. Activist Klaus Weber declared coffee a “luxury” and stated, “We won’t accept this.” In Portugal, the government debates subsidies for small businesses in the sector.

Vietnam, with a 10% larger harvest forecast for 2025, offers global hope. However, logistical hurdles persist. Nguyen Van Tho of the Vietnam Mercantile Exchange stressed:

“We need efficient ports, not just good harvests”.

Brazil anxiously awaits its 2025 harvest. Louis Dreyfus, an agricultural trading giant, predicted a 30% price drop if production is strong. Meanwhile, the country has become a battleground: farmers invest in irrigation, while investors speculate on futures contracts.

Coffee prices have always been a barometer of the global economy, swinging between crises and booms. In March 1977, the ICO index hit 187 cents per pound, a record that stood for decades. At the time, conflicts in Central America and the oil crisis reduced production, creating scarcity.

In the 1990s, market liberalisation and Vietnam’s emergence as a robusta producer reversed the trend. Prices fell to 50 cents per pound in 1992, plunging Latin American farmers into poverty.

The turn of the century brought new volatility. Between 2004 and 2012, droughts in Brazil and pests in Central America drove prices to 200 cents. In China, coffee became a symbol of urban social mobility, with demand growing by 12% annually.

The COVID-19 pandemic (2020–2023) exposed supply chain fragility and worsened instability. Logistics disruptions and delayed harvests pushed the ICO index up by 50% in 2024.

February 2025 marked the tipping point: 354.32 cents per pound, nearly double the 1977 peak. The ICO attributed the surge to “prolonged droughts, financial speculation, and disruptive trade policies.”

Speculation, in particular, amplified the crisis. ICE data revealed that 40% of the recent price rise stemmed from futures contracts. “Investors now treat coffee as an asset, not a staple,” analysts noted.

The ICO projects prices will only fall with Brazil’s 2025 harvest. “If Brazil produces 60 million bags, the market will stabilise,” the organisation stated. Until then, the world remains hostage to volatility.

The solution lies in agricultural technology investment and international cooperation.

“Without sector investment, coffee will become a luxury item,” warned the ico.