As coffee prices have surged to record highs in recent weeks, some have suggested the price hikes might benefit coffee producers, yet the Fairtrade Foundation warns price volatility may in fact have a negative impact.
According to a Bloomberg market report, coffee prices reached a 52-year high on 10 December, driven by growing concerns over global shortages. Despite a recent drop in Robusta futures, the price of coffee continues to climb largely due to adverse weather conditions and supply chain disruptions.
Global coffee production is also anticipated to fall short of demand by 8.5 million bags in the 2025-26 season, marking an unprecedented fifth consecutive year of deficits.
As coffee prices climb, brokers, producers, and exporters are seeing increased costs, particularly in margin deposits required to hedge against potential losses. These financial pressures are affecting multiple levels of the coffee supply chain.
In response to the price surge, the Fairtrade Foundation has issued a statement underscoring that while higher prices may seem to offer a lifeline for farmers, they are often temporary and do little to address the structural challenges within the coffee sector.
“The recent rise in coffee prices has sparked much-needed conversations about the realities faced by coffee farmers,” says Max Milward, Sustainable Sourcing Manager at the Fairtrade Foundation.
“Price hikes do not necessarily filter down to farmers. The global coffee industry is worth over US$200 billion, yet less than 10 per cent of this wealth remains in producing countries.”
He notes that price volatility makes it difficult for producers to plan effectively or invest in long-term strategies, which impacts their ability to ensure a sustainable future for their businesses.
Milward says the current price hike, influenced by extreme weather conditions in key producing countries such as Brazil and Vietnam, alongside growing global demand, highlights the fragility of the coffee supply chain and the urgent need for long-term solutions.
“It’s crucial to create systems that provide stability and support for farmers, enabling them to invest in their communities and build resilience against climate change. By promoting fair and equitable trade practices, including fair prices and long-term contracts, the coffee industry can help ensure a sustainable and more stable future for both farmers and the wider supply chain,” he says.
