Hot, but getting cheaper: global coffee prices may fall by 20%

Global coffee prices may drop by up to 20% in the coming months. This forecast was made in early summer 2025 against the background of new data on crop conditions in key producing countries and improved weather conditions. According to experts interviewed by Izvestia, the main factor for lowering prices was the increased supply on the world market, especially Arabica beans, which account for about 60% of total production.

Global market

The international coffee market is experiencing a noticeable decline in prices after many years of growth. This is primarily due to favorable weather conditions in the producing countries and an improved harvest forecast for the current season. Experts note that, despite the local correction, the price level remains historically high.

Global coffee prices are currently in a phase of volatility due to a number of factors, said Anna Fedyunina, Associate Professor at the Faculty of Economics at the National Research University Higher School of Economics.

— Prices for coffee (both Arabica and robusta) have actually been decreasing somewhat in recent months. However, it is much more important that despite the current decline, they remain at a significantly higher level compared to previous years," said Anna Fedyunina.

According to her, in 2024, coffee prices reached a maximum level — Arabica rose in price by more than 60% in a year, the price of robusta almost doubled. The main explanation for the price increase is unfavorable climatic conditions: droughts in Brazil and Vietnam. At the same time, global coffee consumption is growing regularly, which additionally puts pressure on prices.

ACRE estimates that the total harvest will reach 64.6 million bags, of which approximately 40.1 million are Arabica.

— In addition, logistical costs and disruptions in supply chains also played a role. If the weather conditions in 2025 are favorable, prices may bounce back a little, but they will still remain above the level of previous years," said Anna Fedyunina.

Falling prices

There was talk of lower coffee prices in February, when the weather situation in Brazil, the largest producer of Arabica beans, began to change. Since then, the market has regained about 10-15% of its January highs, and according to a number of analysts, the potential for decline could be up to 20% compared to peak values.

— Coffee prices have been declining since the peaks of early 2025 following positive news about improved weather conditions in Brazil and Vietnam. But even after the current decline, their level remains abnormally high — 40% higher than the same period last year, although 2024 is a year of high prices. Until 2021, stock prices often fell below $ 100 per pound and usually did not exceed the threshold of $ 150," said Denis Ternovsky, Doctor of Economics, leading researcher at the Center for Agri-Food Policy at the IPEI RANEPA.

According to his calculations, there, in 2025, prices fluctuate in the range of $300-450 per pound. The analyst's forecast is $250-300.

How will this affect prices in Russia

The Russian coffee market has historically followed the global one with a time lag, both in terms of price dynamics and import structure. However, a simple decline in stock prices does not mean an instant reduction in the cost of a drink at retail.

— The change in exchange prices does not directly translate into the price of coffee for Russian consumers. It is influenced by the exchange rate and other costs of sellers. Over the past two years, a period of almost twofold growth in global prices, retail coffee prices have increased by 20-25%, which is comparable to overall inflation. Therefore, it is probably not worth expecting a decrease in retail prices, but we can hope for their stabilization," notes Denis Ternovsky.

Leonid Pavlikov, Managing Director of Equity Capital Markets at Finam Investment Company, agrees with him.

— In Russia, however, I do not think that we will see a significant decrease relative to current levels, due to the expected weakening of the ruble. Any non—increase in the cost of raw materials is a plus for cafes, which traditionally raise prices with an eye to, among other things, inflation. We can expect that margins will be higher under the new contracts, which will have a positive impact on the coffee business," the analyst noted.

What the exchanges say

From a technical point of view, the current situation may indeed be a prelude to a correction, analysts say.

Since the end of the first quarter of 2025, a steady downward trend has been forming for the main coffee futures, confirmed by volumes and fluctuations within technical models, says Daniil Ivanin, chief analyst at VMT Consult.

— There are signs of a reversal on the weekly charts: after the double top in January and February, a downward correction phase began. Support is forming around $280-300 per pound, and if this level does not hold, the downward movement may continue to $ 250. In this case, the decrease from the peaks will be about 20%. Nevertheless, as long as the fundamental drivers — climate and harvest — are developing positively, the bearish scenario looks reasonable," he says.

Russian coffee

According to Ivanin, domestic retail is adapting to the new conditions with a delay of 4-6 months, due to contractual logistics and a reassessment of warehouse balances. However, if the ruble remains relatively stable, prices on shelves may slow down by the fall, and in some segments there may be a slight decrease.

— Despite the decline in quotations on the stock exchange, retail coffee prices in Russia continue to rise. According to EMISS, prices for instant coffee increased by 9.6% in 2024, while prices for ground and grain coffee increased by 13.4%. This dynamic is explained by the fact that the stocks currently being sold were purchased at higher prices," calculated Anton Trenin, an expert at the ACRA corporate ratings group.

The Russian coffee market has its own specifics. It depends on imports, currency fluctuations, and logistical considerations. Therefore, prices in the domestic market react to global trends with a certain lag. Daniil Ivanin emphasizes that domestic prices depend not only on global quotations, but also on the state of demand, duties and the ruble exchange rate. In her opinion, with a steady decline in world prices and a stable ruble, prices in the domestic market can be expected to decrease towards the end of 2025. Manufacturers and retailers will strive to optimize supply chains and use domestic processing to keep costs down.

All the experts surveyed agree on one thing: you shouldn't expect a price shock, but the market is gradually entering a stabilization phase after the extremely volatile years 2023-2024. Lower global prices may be a chance to redistribute margins in the supply chain and strengthen the positions of both distributors and retail chains. However, end consumers are likely to feel the effects no earlier than the end of 2025.

Izvestia sent requests to the Ministry of Industry and Trade and the Ministry of Agriculture, but received no responses at the time of publication.