What You Need to Know About the Rising Cost of Your Daily Coffee

The coffee segment in Brazil has seen a significant price increase from 2018 to 2030, primarily due to various external factors affecting supply and demand. Here's a detailed analysis: 1. **Impact of Climate and Weather**: Brazil, being the world's largest coffee producer, has faced climate-related challenges that have affected its coffee output. This has led to price increases as supply has decreased. For instance, the average price of Arabica coffee, which was $4.30 per pound in February 2025, has dropped to $2.80 due to these production issues. 2. **Tariff Impact**: The imposition of tariffs by the US, particularly a 50% tariff on Brazilian coffee, has disrupted the market and increased prices. This tariff has made Brazilian coffee exports to the US unprofitable, leading to a search for alternative supplies and increased demand on other coffee-producing countries. 3. **Global Supply Chain Disruptions**: The tariffs and climate issues have caused ripples through the global supply chain, affecting not only the coffee industry but also retailers and consumers. Companies like Coca-Cola, which owns Costa Coffee, are considering selling the subsidiary amid these challenges. 4. **Inflation and Price Increases**: Inflationary pressures have also contributed to the rise in coffee prices. Companies like J.M. Smucker Co. have had to increase their prices to cope with the rising costs of imported raw materials like coffee. The average retail price of roasted coffee has risen by 14.8% since last July, reflecting the broader inflationary environment. In conclusion, the coffee segment in Brazil has experienced a complex interplay of factors that have led to significant price increases. Climate issues, tariffs, and global economic factors have all played a role in shaping the current market dynamics. As these factors continue to evolve, the coffee market is likely to remain volatile, with potential for further price fluctuations.