Short Story Long: A transparent look at what's going on with coffee prices

The coffee industry is experiencing unprecedented price surges, and as a specialty coffee roaster, we want to be transparent about what's happening in our supply chain. 

 What's driving this surge? and is this just a temporary spike – or are we seeing fundamental changes in the global coffee market? No matter if you drink instant coffee, brew your own espresso at home or love to grab a flat white from your local cafe, prices are on the rise. This is not a shock value blog, rather an honest look into what's happening with coffee on a global scale.

The "C" Price 

The C market price is the commodity coffee index by which all washed arabica coffee is price marked. The index is measured in USD per pound. No we don't buy commodity grade coffee, we buy specialty coffee-considered to be on the premium end of the industry but when the C price moves it affects all things coffee including the specialty coffee industry. 

A Rising Tide Lifts all Ships

Significant C price changes reflect fundamental supply issues affecting all coffee production. Additionally, high C prices can pressure specialty buyers to adjust their premiums upward to prevent farmers from selling their high-quality crops to the commodity market instead. In simpler terms, commodity green coffee buyers start buying more specialty grade coffee as the commodity coffee prices surge and become less attractive. Why buy low grade when there's an ever decreasing price gap between low and high grade coffee right?

Between January 2024 and January 2025 the C price went from $5.70/kg to $15.10/kg. A representative increase of 155%. Put simply this is a parabolic price increase. Since the late 80's the C price has been relatively stable with equal up and down but since Covid we have seen climbing prices. The chart below highlights the dramatic increase since 2019 and the parabolic rise into 2024-25. Note: the chart has been converted into AUD/KG for easy reference.

The Influencing Factors

So what drives the C price northward? Many factors come together to determine the trajectory of the C price. These currently include but are not limited to; 

• Climate cycles- Climate has become one of the primary drivers of these price increases. Brazil, the world's largest coffee producer, has experienced recurring patterns of drought and frost that align with historical long form weather cycles, significantly impacting crop yields. Global coffee production although moderately up in the 2024-25 season is still falling well short of pre covid levels. This creates tensions around global coffee supply shortages. Many of our stable origins that we buy year in and year out have simply not been available to buy.
• Labour and production costs- Many coffee producing regions are experiencing a shortage of skilled workers for harvest seasons, partly due to urbanization and younger generations seeking opportunities outside agriculture. This means that skilled labour is more valuable and wages are higher. Additionally, the cost of fertilizers, processing equipment, and transportation has skyrocketed. These increased expenses, or inflation, are finally being reflected in green coffee prices, after years of unsustainably low rates that often left farmers operating at a loss.
• US dollar- The dollar has been in a strong position in the last 18 months. As the dollar strengthens, all other currency weaken. Since all coffee is traded in US dollars first we are at the mercy of its movements, the stronger the dollar the more Australian dollars are required to buy the same amount of coffee. 
• Demand- We are seeing a shift in consumer behaviour. The growing specialty coffee sector can be attributed to consumers worldwide developing an appreciation for specialty coffee. This growing demand for high-quality beans, combined with limited supply, has created intense price pressure in our segment of the market.

How do Roasters Navigate This?

Most specialty coffee roasters in Australia secure their green beans through forward contracts with importers or directly with producers, typically spanning 3-12 months. These contracts lock in both volume and price, protecting roasters from short-term market volatility while guaranteeing farmers a set income. 

The timing of contract renewals is critical. When existing contracts expire, roasters must renew agreements at current market rates. If global coffee prices have risen significantly – as they have recently – the new contracts will reflect these higher prices. This means that while roasters can temporarily shield customers from price increases through existing contracts, eventually these higher costs must be passed on.

Most Australian specialty roasters maintain multiple overlapping contracts for different origins to ensure consistent supply. When several contracts expire around the same time and need to be renewed at higher rates, roasters often have to implement price adjustments across their product range. This is particularly noticeable in the current market, where many contracts signed before recent price surges are coming up for renewal.

This contract-based purchasing system explains why some roasters maintain stable prices longer than others during market upheavals. However, it also means that price increases, when they do come, tend to be more substantial as roasters adjust to new market realities all at once.

Will My Seasonal Blend be going up?

Yes. As much as it pains to do so we must move with the cost of coffee globally. Some of our mainstay origins such as Brazil have surged 40% between contracts while others are simply not available to purchase at all.

Doing business in Tasmania comes with many challenges, the main one being that coffee has to travel as far south as geographically possible from its producing origins to reach us here in Tassie. This adds significant freight and logistics costs that many mainland roasters do not have to deal with.

Despite this we manage to lean on our 15 year plus industry relationships to keep the good coffee coming and prices as reasonable as possible. 

From the beginning of March we will have a 5% increase across our coffee blend range and subscription products which we are pleased to say is a marginal increase compared to the surging price of coffee globally.

Now is a great time to remind you that we offer free shipping on online orders of 3kg or more. We also have coffee circle which offers exceptional value. A new and exciting coffee landing on your doorstep every month for as little as $52 per kg. All of the coffee circle coffees would retail at prices much higher than what they are offered for through coffee circle......If you also want to lock in your pricing you can choose a pre-paid subscription meaning your price will not fluctuate for the subscription period of either 6 months or 12 months.

We are also working in the background on our website loyalty rewards program. We plan on providing further real value to our customers through this program. This rollout is likely to occur later in the year. 

Whats next?

We are hoping to see a stabilising C price in the next 3-6 months but no one can predict whats coming down the pipe. If you notice your 1kg bag of coffee rise by a few dollars please consider this increase is likely not truly representative of the real cost that business has had to absorb on that product. 

It's a really challenging time for the industry so we encourage you to continue to support your local cafe and roaster. The entire coffee industry is feeling the pressure of market conditions but we will keep our chins up, keep roasting and look forward to our morning Ritual!