Prepare yourself for a decidedly more bitter awakening. If you thought that the price increases were just a bad memory, there is some very bad news: the price of coffee has started to overheat again on the financial markets. In the space of just a month, the prices of the prized Arabica variety have soared by 30 percent, returning to the record levels of last January.
Above all, the market is supported by uncertainties regarding Brazil, the world’s leading producer. In a phase characterized by very low certified stocks, any possible problem in the harvest or quality of the beans causes immediate reactions from investors.
The rains that slowed down the Brazilian harvest
It all starts from very far away, precisely from the plantations of Brazil. Usually, early summer is the crucial time for harvesting, a job that requires dry weather. This year, however, the opposite happened. The exceptional rainfall recorded in June in the main production areas of Brazil slowed down the harvest and complicated the drying of the beans, which requires mainly dry conditions. Excess humidity can encourage unwanted fermentation, mold and quality defects, particularly for coffees processed using natural methods. According to Safras & Mercado, 52 percent of Brazilian production had been harvested as of early July, compared to 60 percent achieved in the same period in 2025 and a five-year average of 55 percent. The delay mainly concerns Arabica crops.
The tensions are confirmed in the latest report from the International Coffee Organization which has begun to incorporate the climate risk linked to the Brazilian rains and the strengthening of El Niño. The now well-known anomalous overheating of the waters of the Pacific Ocean which is disrupting the world climate. For coffee, it means crazy temperatures and totally unpredictable rains that risk burning future crops even before flowering.
In its June report, the organization cited a 67 percent chance of an exceptionally intense event. The forecasts were subsequently revised upwards: in the July 9 update, NOAA indicated an 81 percent probability that El Niño will reach a “very strong” intensity between October and December, placing it among the most important episodes observed since 1950. The effects are not automatic nor identical in all regions, but an intense El Niño can alter temperatures and rainfall distribution in the main producing areas. The focus is mainly on the next flowering phases and the prospects of future harvests.
Stocks are at their lowest
The reduced level of certified stocks, i.e. coffee stored in authorized warehouses and available for delivery through the futures markets, contributes to amplifying volatility. At the end of June, certified stocks of Arabica in the United States had decreased by 13.3 percent compared to the previous month, stopping at around 410 thousand bags: the lowest level since February 2024. Those of Robusta in London had instead increased by 4.8 percent, reaching 680 thousand bags. Overall, however, certified inventories remain very limited and leave the market limited margins to absorb new supply interruptions.
How much will a cup of coffee cost
Today a cup of espresso at a bar in Italy costs on average around 1.30 euros (with obvious price increases in the most touristy areas), up by 3.5 percent on an annual basis. But how much more could it increase? Actually not much. Agricultural raw materials only account for a few cents. To prepare an espresso, Fipe calculated in 2024 that approximately 7 grams of roasted coffee are needed, corresponding to approximately 8 grams of green coffee: in practice the green coffee contained in the cup is worth approximately 4 cents; after roasting, processing, packaging and distribution, the product arrived at the bar with a value of around 20 cents.
In practice, on an espresso sold for around 1.30 euros, the value of the green coffee only accounts for a few cents, while the product already roasted, packaged and delivered to the premises can weigh around 20-25 cents. The largest part of the price is used to cover the cost of personnel, rent, energy, water, machine maintenance, consumables and administrative costs, as well as 10% VAT.
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