Global coffee prices have surged to record highs, signaling further increases in retail coffee costs.

According to Reuters and other sources, Arabica coffee futures reached $3.44 per pound on the New York market on the 10th of this month, surpassing the previous record high of $3.38 set in 1977. Arabica bean prices have skyrocketed by over 80% this year alone.

While Arabica beans, typically used in premium coffee, have reached record highs, Robusta beans—used primarily in instant and low-cost coffee—also hit their highest price ever in September.

The price surge is largely attributed to prolonged drought conditions in Brazil, the world's largest coffee producer, which have raised concerns about next year’s coffee harvest.

Volcafe, a global coffee trading company, recently exacerbated market anxieties by drastically revising its 2025–2026 forecast for Brazil’s Arabica coffee production. The company now estimates production at 34.4 million bags, approximately 11 million bags fewer than its September projection.

Volcafe further indicated that global coffee supply will fall short of demand by about 8.5 million bags, marking the fifth consecutive year of supply shortages. Supply concerns are also mounting in Vietnam, another major coffee producer, due to dry weather during the growing season and heavy rains during the harvest season.

As wholesale prices rise, coffee shops, including Starbucks, have consistently passed on the higher costs to consumers. Analysts suggest that rising coffee prices are contributing to declining customer visits and weaker sales at Starbucks. One Korean-American consumer, Mr. Kim, commented, “I’ve stopped buying coffee after lunch and instead drink the coffee provided at my office. With lunch prices already high, the steadily rising cost of coffee is becoming a financial burden.”

A coffee industry expert interviewed by the BBC stated that many coffee brands are considering price hikes in the coming year. A senior executive from Nestlé, the world’s largest coffee producer, recently mentioned at an event that the company may need to increase prices and reduce packaging sizes due to soaring coffee bean costs.

The BBC also reported that while coffee production is expected to decline, global demand for coffee remains strong. For instance, coffee consumption in China has more than doubled over the past decade, according to the media outlet.

By Hwang Dong Cho

<Hwandong Cho>