The organization of the FAO for agriculture and rural development announced today that global coffee prices have reached their highest level in many years in 2024, increasing by 38.8 percent compared to the previous year, primarily due to unfavorable weather conditions affecting key producing countries. According to the FAO memorandum on global coffee market trends, published in the media, by December 2024, the price for "Arabica", a high-quality and preferred type of coffee for blending and instant coffee, will rise by 58 percent compared to the previous year, while the price for "Robusta", which is primarily used in instant and blend coffee, will increase by 70 percent in real terms. The global coffee trade is assessed to exceed 25 billion dollars annually, with this global coffee industry bringing in revenues of over 200 billion dollars each year. This indicates a narrowing price differential between the two types, the lowest since the mid-1990s. The FAO reported that the export coffee prices could rise markedly in 2025 if key coffee regions face significant supply reductions. Key factors contributing to the recent price increase include restrictions on the volume of exports from Vietnam, reduced production in Indonesia, and unfavorable weather conditions impacting coffee production in Brazil. In Vietnam, prolonged drought has led to a 20 percent decrease in coffee production in the 2023-2024 season, while exports fell by 10 percent for the second consecutive year. Similarly, in Indonesia, coffee production in the 2023-2024 season decreased by 16.5 percent compared to the previous year due to abnormal rains in April and May 2023, which damaged coffee trees, and exports dropped by 23 percent. In Brazil, dry and hot weather conditions contributed to a subsequent reduction in production forecasts for the past season, contrary to official expectations of an increase of 5.5 percent, with the decrease being 1.6 percent. It has also been established that the increased cost of transport is one of the factors contributing to the increase in global coffee prices. Data indicate that in December 2024, the increase in global prices will lead to an increase in coffee prices by 6.6 percent in the USA and by 3.75 percent in the European Union compared to the same period in 2023. The director of the FAO market department, Boubacar Ben Belhassen, stated: "It is assumed that high prices contribute to increased investments in technology and research activities in the coffee sector, which significantly depends on small farmers to strengthen their ability to adapt to climate change," adding that climate change over the long term affects coffee production. The FAO actively supports coffee producers in many countries, helping farmers introduce technologies resilient to climate change, which also helps restore lost biodiversity. The FAO emphasizes the importance of market transparency and encourages cooperation from all parties involved in the supply chain to support sustainable growth in the global coffee industry and ensure resources for the sustenance of millions of small producers worldwide. Brazil and Vietnam together account for about 50 percent of global coffee production, while small farmers play a vital role in the coffee sector, representing 80 percent of the global coffee production.
