1. Weekly News

Global

Coffee Prices Spike Amid Global Supply Challenges, Declines Expected by 2025

Coffee prices experienced sharp increases in Dec-24, with Arabica surging 13% month-on-month (MoM) and over 60% year-over-year (YoY), while Robusta rose 5% MoM. Global production for the 2023/24 season reached 169.8 million 60-kilogram (kg) bags, projected to rise modestly to 172.4 million 60-kg bags in 2024/25 but still below 2020/21 levels. Despite improved weather conditions supporting Robusta crops in East Asia, supply concerns persist, with Brazil’s Arabica production facing significant shortfalls. . Prices are forecasted to decline by 8% in 2025 and stabilize in 2026 as supply improves, alleviating current market pressures.

Africa

Africa’s Coffee Industry Adapts to EUDR

Africa’s coffee industry is undergoing significant changes to comply with the European Union’s Deforestation Regulation (EUDR), which mandates that all coffee entering the European Union (EU) be deforestation-free from post-2020. Set to take effect in Dec-25 for large companies and Jun-26 for smaller entities, the regulation poses challenges, particularly for smallholder farmers who produce over 60% of Africa’s coffee. Compliance requires costly traceability systems, like geolocation tools, which many farmers struggle to afford. Efforts by nations like Uganda and Ethiopia include partnerships, training, and sustainable farming initiatives to meet the requirements. Despite the financial burden, EUDR compliance could allow African coffee producers to command premium prices and bolster their global reputation for sustainable practices.

Colombia

Colombia Achieves Record Coffee Harvest in 2024

In 2024, Colombia achieved a historic coffee harvest, producing 13.9 million 60-kg bags, a 23% increase YoY and the best yield in five years. This growth resulted from investments in crop renewal, adoption of disease-resistant varieties, and the dedication of Colombian farmers. Record-high global coffee prices in Nov-24 further boosted production and exports, which generated over USD 3.7 billion, solidifying coffee as a key economic driver alongside oil and mining. Despite this success, challenges such as declining cultivation areas, an aging workforce, and climate change threaten the sector’s long-term sustainability.

Kenya

Climate Change Threatens Kenya's Coffee Industry

Renowned for its premium Kenya AA variety, Kenya’s coffee industry faces significant challenges due to climate change. Farmers in Komothai, Central Kenya, report declining production caused by rising temperatures, erratic rainfall, and increasing pests and diseases like coffee berry disease. These issues necessitate costly pesticides and herbicides, further straining farmers already grappling with low wages. Water scarcity, caused by irregular rainfall and declining river levels, adds to the difficulties, forcing reliance on limited irrigation. Despite adaptive measures like planting shade trees, many farmers express concern over the industry’s long-term sustainability amid escalating environmental and economic pressures.

Uganda

Pader District Targets Coffee Farming to Boost Incomes

Pader District in Uganda is prioritizing coffee farming under the National Development Plan 4 (NDP4) to enhance household incomes and fight poverty. With over 15,000 farmers dedicating at least two acres each to coffee cultivation, the initiative provides seedlings, training, and irrigation support through the Ministry of Agriculture. Coffee’s low-maintenance requirements and profitability, earning UGX 5,000/kg, make it an attractive option compared to traditional crops. Despite challenges like erratic weather and limited extension services, farmers remain optimistic, supported by soil testing, irrigation promotion, and best-practice training. In 2023, Pader sold two tons of processed coffee, with higher production anticipated in the coming years.

2. Weekly Pricing

Weekly Coffee Pricing Important Exporters (USD/kg)

Yearly Change in Coffee Pricing Important Exporters (W2 2024 to W2 2025)

Brazil

In W2, coffee prices in Brazil experienced a week-on-week (WoW) drop of 3.90%, decreasing from USD 7.70/kg to USD 7.40/kg. This decline follows the price peak observed in W52 2024 and W1 2025, suggesting a slight market stabilization. However, despite the weekly drop, prices remain higher by 4.23% MoM and 23.13% YoY, largely due to global supply constraints. The price increase is primarily due to severe drought conditions in Brazil, one of the world's largest coffee producers. These droughts have significantly reduced rainfall in key coffee-growing regions, directly impacting coffee production. Additionally, the 2025/26 crop year is projected to see a 15% decline in Arabica output, which will likely keep prices elevated.

Colombia

In W2, Colombia's coffee prices saw a slight WoW increase of 0.83% to USD 7.26/kg, stabilizing after the drop in W1. However, MoM and YoY prices have decreased by 1.09% and 12.11%, respectively, reflecting the impact of market conditions. The declines are primarily attributed to Colombia’s record coffee harvest in 2024, which increased by 23% YoY and reached 13.9 million 60-kg bags. While the industry faced a high production yield, the sector also is facing high exports and long-term challenges such as declining cultivation areas, an aging workforce, and climate change, which may hinder future growth.

Vietnam

In W2, Vietnam's coffee prices were relatively stable, with a WoW increase of 0.21%, reflecting normal price fluctuations. However, MoM prices dropped by 2.87%, primarily due to a slight easing of prices as supply increased with stabilizing production levels. Looking ahead, prices may drop further as Vietnam's coffee production is expected to increase in the 2024/25 season to 30.1 million 60-kg bags, up by 9.45% YoY, pushing prices downward.

3. Actionable Recommendations

Diversify Supply Sources and Focus on Resilient Varieties

Given the ongoing global supply challenges and weather-related disruptions, such as Brazil's droughts and Kenya's climate change issues, producers should consider investing in resilient coffee varieties that can better withstand changing environmental conditions. For example, adopting disease-resistant and drought-tolerant varieties, as seen in Colombia, can mitigate production risks and help stabilize supply.

Strengthen Sustainable Practices for Premium Pricing

With new regulations like the EUDR, there is a significant opportunity to focus on sustainability initiatives. Exporters should invest in traceability systems, such as geolocation tools and certifications, to meet EU standards. By doing so, they can command higher prices, gain access to premium markets, and enhance their global reputation as sustainable producers.

Capitalize on Record Harvests and Focus on Export Optimization

Countries like Colombia and Uganda are experiencing record harvests. It’s crucial for these nations to optimize their export strategies, such as strengthening partnerships and expanding marketing efforts to reach global markets, especially due to the shortage in other producing regions. Additionally, expanding infrastructure, including processing facilities and improved logistics, can increase efficiency and profitability.

Sources: Tridge, Ecuavisa, Independent UG, STiR, The Jerusalem Post, The Scottish Farmer, World Bank,