For years, coffee prices moved with supply, demand, and speculation. That equation has changed.

Extreme weather featured in headlines frequently in 2024. © Slow/Saosavanh Ketmala

 

Climate volatility now sets the term, overriding traditional market forces and driving unpredictable swings in pricing. 

Brazil, the world's largest coffee producer, has already sold most of its current Arabica harvest. However, the upcoming crop is projected to decline by 4.4%, reaching an estimated 51.8 million 60-kilogram bags due to erratic weather. Stockpiles in Brazil have significantly decreased, with estimates suggesting they will drop to around 1.2 million bags by the end of the 2024/25 season—a 26% decline from the previous year. Another climate shock could cause prices to skyrocket.

In Vietnam and Indonesia, drought is severely impacting Robusta production. Traders are withholding supply, anticipating further price increases.

On the ICE exchange, coffee futures have shot past $4.30 per pound—an all-time high. The only relief? A strong harvest from Brazil and Vietnam, which won’t happen until August 2026, or demand dropping as coffee becomes too expensive. Until then, price swings are here to stay.

The coffee industry is in adaptation mode

Climate change isn’t just making coffee more expensive—it’s disrupting the entire supply chain. Extreme weather events are becoming more frequent and more severe. That means higher production costs, shrinking harvests, and unpredictable pricing.

The industry is adapting in two ways:

1. Rethinking how coffee is grown

Agroforestry is gaining traction. This means planting trees on coffee farms to protect crops from heat, store more carbon, and create a more stable ecosystem. Studies show agroforestry farms can store three to four times more carbon than traditional coffee plantations. That’s good for the planet and for farmers.

2. Finding hardier coffee plants

Warmer temperatures and disease outbreaks are pushing traditional coffee varieties to their limits. But wild coffee species, which could help, are disappearing fast. A 2019 study found that 60% of them are at risk of extinction.

There is hope, though. In Sierra Leone, researchers rediscovered Coffea stenophylla, a rare species that survives in temperatures 6°C higher than Arabica and 2°C higher than Robusta—without losing its flavor. Trials are already underway in Sierra Leone and Réunion Island.

Selective breeding is another approach. The EU-funded BreedCAFS project is developing hybrid Arabica plants by crossing American and Ethiopian varieties. These hybrids are designed to thrive under shade, produce high yields, and resist disease. Early trials in Vietnam, Cameroon, Nicaragua, and Costa Rica show promising results—productivity up by 10–20%, pesticide use down by up to 20%. If accredited, these hybrids could help secure the future of coffee.

What happens next?

Coffee farming can’t rely on past growing patterns anymore. Without big changes—both in how coffee is grown and how supply chains are financed—climate volatility will decide who gets to drink coffee and how much it costs.