Coffee lovers across the motu are noticing a trend that's hard to ignore: rising coffee prices. Whether you're sipping on a morning flattie or enjoying a quiet afternoon brew, the cost of your beloved beverage keeps climbing. But what’s behind these price jumps? We’re here to break down what’s happening in the world of coffee—and what it means for you.
Understanding the Global Coffee Market
To really understand why coffee prices are rising, we need to look at the global coffee market. Coffee is traded as a commodity, meaning its price is driven by supply and demand. Simply put, when demand outweighs supply, prices go up.
Climate Change and its Impact
One of the biggest headaches affecting coffee prices is climate change. On the surface when you look at the average climate temperatures, things don't look too bad in the coffee realm. But when it comes to agriculture - of course working to averages just doesn't work. Let's look at it like this: If I were to put you in an oven, you'd be pushing up daisies right? And if we're to put you in the freezer - yep - you'd be meeting the big barista in the sky. But hey, if we look at the averages - you'd be sweet! Though coffee plants are actually pretty hardy, the extremes they are being exposed to are really wreaking havoc. If coffee plants don’t get rain at the right time during their maturation phase, fewer buds develop into cherries, reducing the overall harvest. Regions that were once ideal for growing coffee are facing unpredictable weather patterns like severe droughts and heavy rainfall leading to reduced yields which in the end, means we will be paying more to fuel our caffeine addiction.
Climate related challenges are being faced in all coffee growing regions across the world from Colombia to Vietnam and everywhere in between. Take Brazil, the world’s largest coffee producer, where farmers have been battling extreme weather fluctuations for five years straight. Why does this impact coffee so much? Coffee plants have a two year maturation cycle, so unlike wine where each harvest comes around annually, we have to wait an extra 12 months for those beautiful red cherries that eventually become coffee beans to appear. The crop yield is largely affected by the previous year's weather pattern, so shortages—and rising prices—are likely to continue for the foreseeable future.
The Role of Supply Chain Disruptions
Another ingredient to the secret sauce of rising coffee prices is the ongoing supply chain disruptions that have lingered since our old friend - first name Co, last name Vid - reared its ugly head. Shipping delays, labor shortages in coffee-producing countries, attacks on containers in the Red Sea and logistical challenges have all made it harder - and more expensive - to get coffee to its ultimate destination: your cup.
Increased Production Costs
The cost of coffee production has been rising steadily in recent years. Farmers now face soaring expenses for labor, essential resources, and skyrocketing fertilizer prices. In Colombia, for example, the price of urea—a common, low-cost fertilizer—jumped by 187% in just one year. (1)
As farmers struggle to stay afloat, these increased costs inevitably get passed down to consumers. And if production expenses keep climbing, so will the price of your daily brew.
The NZ exchange rate
Coffee is traded globally in USD, which means fluctuations in exchange rates directly affect what we pay for green beans. When our local currency weakens against the USD, it drives up costs—even if coffee prices stay the same on the global market. This added pressure is one of the many factors influencing the rising cost of coffee, and like always, we’re doing our best to navigate these shifts while keeping quality and fairness at the heart of what we do.
EU regulations for Deforestation
In June 2023, the European Parliament and European Council introduced the Regulation on Deforestation-Free Products (EUDR). This law bans EU companies—including coffee traders and roasters—from importing commodities linked to deforestation.
Fears that farmers wouldn’t be able to certify their crops in time for the December 2024 deadline led to stockpiling among some European suppliers, further tightening supply. However, the law has been delayed by a year and will now take effect at the end of 2025. Only time will tell how it will impact coffee prices once the initial stockpiling settles.
Demand for Specialty Coffee
In recent years, consumer preferences have shifted toward specialty coffee, with many willing to pay a premium for unique flavors and experiences. This growing demand has contributed to rising prices.
Specialty coffee sales have surged over the past five years, with traditionally tea-drinking markets like India and China entering the scene. As coffee shops adapt their offerings to meet this demand, even standard coffee hasn’t been immune to price hikes.
Looking Ahead: What to Expect
As coffee drinkers, it’s good to know what’s behind these rising prices. Industry experts are predicting that prices will stay higher and potentially climb even more for a while yet, mainly because of climate issues in the regions where coffee is grown.
We all have that special connection to our daily coffee fix, but as prices go up, we might have to get a little creative. Maybe it’s time to try some new brewing methods at home and support our favourite local cafes as much as we can.
Final Thoughts
The reasons for rising coffee prices are pretty complicated—climate change, supply chain issues, production costs, shifting tastes, and general economic stuff all play a part. It’s not the most fun news, but understanding why it’s happening can help us make informed choices when it comes to buying coffee.
As we roll with these changes, let’s keep enjoying our beloved brew. Let’s back local Kiwi businesses and maybe dive into the world of home brewing. Even with prices going up, a great cup of coffee is still totally worth it.
