Coffee: Cycles

Why coffee hit its highest real price in fifteen years

The World Bank Arabica price was $7.26 per kg in September 2026, below $8.83 a year earlier but far above $4.97 five years ago. The ten-year range ran from $2.66 to $9.05, the latter also the highest since 2000. In real 2010 dollars the 2025 average of $7.29 was the highest in fifteen years, against $2.80 in 2013. Booms come from Brazilian frosts or droughts and from Vietnamese weather. High prices prompt new planting, which arrives as supply only after several years and sets up the next bust.

Coffee, Arabica price

Chart: Coffee, Arabica monthly price

Chart: Coffee, Arabica annual real price

Super-cycles in coffee

Coffee does not follow the metals super-cycle closely. Its price is driven by weather shocks in Brazil and Vietnam on top of a slow tree-crop supply response, which creates sharp spikes every decade or so and long periods of low prices. The World Bank arabica price rose from a monthly average of about $0.94/kg in 1960 to $7.00/kg in April 1977 after Brazil's 1975 frost, collapsed to $1.20/kg in 2002, and set a nominal record of $9.05/kg in February and November 2025. In real 2010 dollars arabica averaged $5.38/kg in 2011, $2.87/kg in 2018 and $7.29/kg in 2025, so the 2025 price was a genuine real high. Export quotas under the International Coffee Agreements (in force 1963-1972 and 1980-1989) supported prices until they were abandoned in July 1989, when the agreement lost support from both consumers and producers (Radetzki and Wårell).

1. 1975-1977

   The July 1975 'black frost' in Parana and Sao Paulo destroyed a large share of Brazil's trees, which took years to replant.

   World Bank monthly average arabica from $1.23/kg (Jun 1975, just before the frost) to $7.00/kg (Apr 1977); robusta $6.88/kg (Apr 1977)

2. 1985-1989

   A Brazilian drought lifted prices in 1986; in July 1989 the International Coffee Agreement's export quotas collapsed as producers and consumers disagreed, and prices halved.

   monthly average $5.28/kg (Mar 1986) to $1.51/kg (Oct 1989)

3. 1994-1997

   Two frosts in Brazil in 1994 and low stocks drove a new spike.

   monthly averages: robusta $4.03/kg (Sep 1994); arabica $5.89/kg (May 1997)

4. 1999-2004

   The 'coffee crisis': Vietnam's robusta expansion and big Brazilian crops pushed prices below production cost for many smallholders.

   monthly averages: arabica $1.20/kg (Aug 2002); robusta $0.50/kg (Jan 2002)

5. 2010-2013

   Low stocks and poor Colombian crops lifted arabica, then large Brazilian harvests brought it down.

   monthly average $6.62/kg (Apr 2011) to $2.69/kg (Nov 2013)

6. 2023-2026

   Brazilian drought and heat, poor Vietnamese robusta crops, low certified stocks and EU deforestation rules created the highest prices on record; prices eased in 2026 as supply recovered.

   monthly averages: arabica $4.56/kg (Jan 2023) to a record $9.05/kg (Feb 2025), $7.26/kg in Sep 2026; robusta $2.12/kg (Jan 2023) to $5.81/kg (Feb 2025), $3.69/kg in Sep 2026

What drives the cycle

• Brazilian weather (frost, drought, heat). Brazil grows about 30% of world coffee; a frost or drought cuts output for two or more seasons because damaged trees must regrow.
• Vietnamese robusta output. Vietnam grows about 18% of world coffee and most traded robusta, which sets instant coffee costs.
• Stocks in consuming countries and on exchanges. Low certified ICE stocks and thin roaster inventories turn small supply losses into large price moves.
• Brazilian real and producer selling. A weaker real raises local prices and encourages farmers to sell, adding supply.
• Demand growth in Asia. Asia and Oceania already drink 25.8% of world coffee (ICO 2023/24), and consumption in China and India is growing.
• Regulation and certification. The EU Deforestation Regulation requires geolocated, deforestation-free coffee, which raises compliance costs and can split prices by origin.

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