The worst drought in 70 years has led to further increases in the price of Colombian coffee. 2025 doesn’t look any better

When we talk about coffee, we talk about Brazil and Colombia. These are two Arabica coffee heavens, and while there are nuances and struggles between them over which one is better, it is clear that Colombian coffee is one of the country’s most emblematic products and is deeply rooted in both. local culture as international. And this coffee is experiencing significant price increases, not because of quality or exclusivity issues, but because of external factors that affect both buyers and producers.

This new coffee crisis is largely due to the severe drought as well as geopolitical issues. And the worst thing is that the future of prices for Brazilian and Colombian coffee does not inspire optimism.

Drought in Brazil. Coffee production in Brazil accounts for a third of world production. It is a huge market and has become the largest coffee producer in Latin America and the Caribbean. In 2023, Brazil’s production was 55 million 60kg bags and is expected to exceed this figure in 2024 with 59 million bags produced.

Let’s see if the predictions finally come true as Brazil faces its worst drought in more than 70 years. Temperatures reach 44 degrees and the average is higher than other years, which is already affecting the 2025 harvest. There are already growers who claim that there are plants that die before flowering, and this is out of 120 bags of grain that they harvest. They are expected to harvest this season, but they only harvested 100 pieces.

Influence in Colombia. This drought is affecting not only Brazil, but also Colombian plantations. Alexandre Taborda, a representative of the Antioquia coffee committee, notes that there is a risk that the coffee cherries will not reach the proper weight and quality due to the extremely hot conditions in August and September.

Colombia is another giant coffee market, and they’ve had a nice moment this year with exports increasing by 36% in the first half of 2024 compared to the same period the previous year. The problem is that more exports do not mean more benefits for producers: if the quality or weight of the coffee is lower, large buyers have the opportunity to adjust prices, so there will be less benefits for producers.

Coffee inflation. This series of coffee disasters has already had an impact on the stock market. In recent days, a pound of Colombian Arabica coffee was worth $2.70 on the New York Stock Exchange. In 2024, this increase will be 43%, which means that the price for the end consumer will also increase. Giuseppe Lavazza, president of the Lavazza group, already stated a few weeks ago that he has never seen such an increase in prices as now, and this is something that affects the international price of coffee, but also the local one.

In Colombia, 125 kilograms of dry parchment coffee in 2023 cost 1,360,000 pesos, about 302 euros. Now the same package costs 2,200,000 pesos, about 488 euros. And the bad news is that the second half of the harvest is now starting, representing 60% of the annual production for 2025, and producers expect prices between 1,800,000 and 2,000,000 pesos to be profitable, between 400 and 450 euros.

Differences between big and small. Okay, a cup of coffee will be more expensive, but what about the manufacturers? If you pay more for coffee, you’ll earn more, right? Well, well… it doesn’t seem like that. At least not for everyone. The coffee market in Colombia is made up of 90% small coffee producers. These producers have plantations of less than five hectares and produce 60% of the country’s coffee. The remaining 10% of coffee farmers have medium and large plantations, which produce 40% of Colombian coffee.

This is a very uneven distribution, and when negotiating, not all producers benefit from higher Arabica coffee prices. Cause? This price increase comes at a time when large producers have already harvested their crops, but many small producers have not yet started harvesting, so they have not benefited from the increase.

War and transport. With the outbreak of war between Russia and Ukraine, in addition to the escalation of violence in the Middle East, prices for some products have increased. It’s not that there are products that come directly from these countries, but that shipping to these countries now costs more. This is something that can seriously affect the economy, Russia and Colombia being examples.

Colombia exports not only coffee but also many other products to Russia, and renting an aircraft during the worst months of the conflict in some cases increased its price tenfold, which contributes to this escalation in coffee prices.

Girl and Boy. And as if several simultaneous wars and a colossal drought were not enough, the worst thing is the perfect storm, causing prices to rise not only for Brazilian and Colombian coffee, but also for coffee from other parts of the world (Robusta from Vietnam, in another part of the world, for example) .

El Niño and La Niña are two extreme climate effects: one causes abnormal warming and cooling of the ocean surface, affecting both temperature and precipitation. The serious thing is that global warming is making these natural phenomena more unpredictable, which directly affects plantations.

Colombia and Brazil aside, in Vietnam, the drought that has also hit the country is expected to lead to a 10 percent drop in Robusta coffee production as it comes into effect right at the cherry stage. And all this is due to the global demand for coffee, which, especially thanks to countries like China, continues to grow.

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