Why are coffee prices so high?

You are starting to hear it everywhere, raw coffee prices are at an all-time high. What does it mean to you?

I have decided to do a small write-up on what drives coffee prices to help explain to our customers why the prices are up. When we are forced to increase prices, our margin is typically the same or even less than usual. To offer the best possible pricing, we operate on a flat margin that we put on top of the current global green coffee price.

Green coffee is a publicly traded commodity, just like oil or gold. This commodity price is what all our green coffee prices are then based on. At the time of writing this article, the “c-market” price is at $2.275. In 2019. the c-market price was as low as $0.88. At the peak of COVID prices, the c-market price was $2.583. You can check it out for yourself by clicking here to view the NASDAQ index for green coffee.

Between 2021 up till the beginning of 2023, we experienced very high coffee prices due to the effects COVID lockdowns had on global shipping and USD vs GBP.

Today, we are facing ridiculously high costs again due to poor weather and harvests. Across the globe, raw coffee inventories are ridiculously low. 2023-2024 global consumption of coffee is estimated to be over 10 million tonnes. Year after year this demand keeps growing, but the production remains largely the same.

What does this mean for us? That any hiccup in production has a huge knock-on effect. If there is poor rainfall in Brazil, the crops suffer and thus all coffees across the world rise in price due to the lack of supply compared to demand. This year, Vietnam, Brazil, and India are all suffering from poor weather conditions. These are some of the biggest players in the green coffee industry. Vietnam is facing a 20%+ drop in output with similar issues in Brazil.

We hope that June/July will see some positive change in the weather conditions for these countries so that the next harvest cycle will improve, allowing for more reasonable coffee prices!

To summarise, the following can cause increased coffee prices in the global c-market:

• Politics/War
• Adverse weather conditions such as frost, drought or even too much rain
• Increased shipping costs
• Issues with currency (e.g. GBP/USD, GBP/EUR)
• General supply and demand
• General inflation

Compound this with all the increasing costs we are facing right here in the UK, and it is a recipe for some very expensive coffee! This would explain why coffee prices are at an all-time high. While we are doing our best to absorb as much of these costs as possible, we need to remain profitable to keep providing you all with the best possible coffee experience.

As soon as there is a positive shift in raw coffee prices, we will reflect those savings to you.

Thank you for your support and understanding!