Coffee production company Arabica experiences an upward trend due to drier weather conditions in Brazil, traditionally one of the major coffee-producing countries.
In the ever-evolving world of coffee, the global market is currently experiencing a surge in consumption levels, particularly in emerging economies such as China. This growth trend, which has been ongoing for over a decade, is set to reach an all-time high of 169.4 million 60-kg bags in the 2025/2026 season, according to industry forecasts.
The expanding demand, especially in emerging markets like Indonesia, the Middle East, and notably China, has more than doubled consumption over the past decade, making China the world's sixth-largest coffee consumer. Meanwhile, specialty coffee continues to gain market share, with innovative trends in coffee types such as mushroom coffee and cold brew formats appealing to younger consumers, particularly in regions like the U.S., South Korea, and Scandinavia.
However, despite this strong demand, coffee prices have been falling recently. On June 17, ICE Coffee C Futures prices dropped to about $3.35 per pound, the lowest in almost five months. This price decline is primarily driven by better-than-expected harvests in key producing countries, such as Brazil (the largest producer of arabica coffee) and Vietnam (the largest producer of robusta coffee).
Brazil's harvest outlook has been boosted by significant rainfall that ended drought-like conditions, while Vietnam is forecasted to significantly increase production by 6.9%. These improved supply conditions have eased some earlier concerns about drought and dryness impacting crop quality and quantity.
Looking ahead, the coffee market continues to expand due to growing demand in emerging economies, premiumization trends, and a rising preference for organic and fairly traded coffee products. However, the market faces challenges including sustainability demands, climate change threats to coffee-growing regions, price sensitivity among consumers, and the need for better consumer education on brewing techniques.
Despite these challenges, coffee remains a lifestyle product, with brands increasingly leveraging AI tools and data analytics to anticipate consumer trends and personalize offerings. As the global coffee market continues to evolve, it remains to be seen how these trends will shape the industry in the coming years.
- Due to the expanding demand in countries like Indonesia, the Middle East, and most notably China, the weather conditions in these regions could significantly impact the coffee production and quality in the near future.
- Even though the coffee market is expected to continue growing due to rising demand in emerging economies, improving supply conditions in key producing countries like Brazil and Vietnam may further lead to a drop in coffee prices.
