If you’ve been following our Instagram series, you’ll be familiar with some of these factors affecting coffee prices. Today, we’re taking the opportunity to delve a bit deeper into why your favourite brew costs what it does. Let’s explore the complexities of the coffee market and how various global factors influence what you pay for your daily cup.

Brazil and Vietnam’s Troubles: A Global Price Wave

To understand why troubles in just two countries can shake the entire coffee market, imagine Brazil and Vietnam as the world’s coffee anchors. Brazil, the global leader in Arabica production, supplies about one-third of the world’s coffee. Vietnam dominates the Robusta market, producing around 40% of this variety.

Brazil has been hit by harsh droughts and unexpected frosts, slashing coffee yields. Vietnam continues to battle extreme weather conditions and increasing plant diseases. These challenges create a domino effect in the global market: as these major producers struggle to meet demand, other countries’ coffee becomes more sought after, driving up prices everywhere.

Logistics: A Perfect Storm

Making matters worse, both countries are facing severe shipping challenges. Brazil’s ports are clogged, slowing exports significantly, and Panama’s dealing with major delays too. Meanwhile, Vietnam is experiencing significant logistical challenges, including transportation bottlenecks and port congestion. These issues mean higher transport costs and pricier coffee beans.

Global Economic Pressures

Energy prices are up, interest rates keep climbing, and global tensions are messing with supply chains, hitting everyone—from growers to your cup. These pressures affect every stage of coffee production and distribution:

• Farm operations and harvesting costs
• Processing and storage expenses
• Shipping and transportation fees
• Local distribution and roasting costs

Market Speculation and Coffee Futures

Investors are betting big on coffee futures, lured by market instability and fears of shortages. Their high-stakes trades are pushing up the “C Price” (coffee commodity price), adding even more pressure on what you pay for your brew.

Why does this matter for your daily cup? When speculation drives up the C Price, it affects real coffee transactions worldwide.

Here’s what’s happening right now:

• Investors are seeing the production challenges in Brazil and Vietnam
• They’re noticing the shipping bottlenecks and rising energy costs
• Many are predicting future coffee shortages
• This leads them to buy more futures contracts, driving up prices
• These higher prices then ripple through the entire coffee supply chain

Why Is Decaf More Expensive?

Many customers wonder why decaffeinated coffee often costs more than regular coffee. The answer lies in the additional processing required:

• The decaffeination process adds an extra step before roasting
• Specialized facilities are required, increasing operational costs
• The process can slightly reduce the total volume of usable beans
• Quality control measures are more intensive
• Transportation costs increase due to additional processing locations

We hope you’ve enjoyed this deeper exploration into the complex world of coffee pricing. We’re incredibly grateful for our amazing customers who make Duffins what it is. As we enter 2025, we remain committed to sourcing the best coffee at fair prices while ensuring our farmers receive the compensation they deserve.