Over the past two years, the global coffee market has experienced an unprecedented surge in green coffee prices. Arabica futures hit a record high of US $4.41/lb in February 2025, marking one of the sharpest increases in decades. For many, this price hike signals long-awaited progress in valuing coffee correctly. But behind the numbers, the question remains: Who truly benefits from high coffee prices?
A Welcome Change—With Hidden Costs
The coffee industry has long been plagued by historically low prices. Smallholder farmers, who produce the bulk of the world’s coffee, have struggled to earn a sustainable income. Many operate at a loss or barely break even, despite producing some of the highest-quality beans.
So, when prices began rising sharply in late 2023, many hoped it would lead to better livelihoods for producers. However, the reality is far more complex. While market prices have increased, so too have the costs of production, financing, and logistics—dampening any potential benefit for producers.
A Perfect Storm: Climate, Conflict, and Cost Pressures
Coffee is a climate-sensitive crop. Countries like Brazil and Vietnam—which together supply nearly 60% of the world’s coffee—have suffered from extreme weather in recent years. Brazil’s 2024 heatwaves and wildfires slashed arabica yields, while a cold snap in August further worsened the damage. Vietnam faced unseasonal rains and droughts, affecting its robusta output.
These supply shocks, coupled with new EU deforestation regulations, created a bullish market. Add in geopolitical tensions, higher tariffs, post-pandemic freight disruptions, and inflation, and you get a market defined by high volatility and escalating costs.
The Illusion of Profitability
The common belief is that when green coffee prices rise, farmers automatically earn more. However, this assumption overlooks the complexity of the coffee supply chain, which is crowded with intermediaries—cooperatives, processors, exporters, importers, and roasters. Each link takes a portion of the final price.
In reality, farmgate prices—the price producers actually receive—do not always reflect the gains seen on commodity exchanges. For example, while some farmers in Honduras and El Salvador reported farmgate prices rising by up to 85%, farmers in Ethiopia and Nicaragua saw limited gains due to weak local liquidity and lack of direct buyer access.
High Coffee Prices, But Rising Costs Too
Across the board, input costs have soared. Fertilizers, pesticides, labour, and packaging have become more expensive. For smallholders without access to pre-financing or economies of scale, this means even a high sale price might not cover production costs.
According to the International Coffee Organization (ICO), supply chain inefficiencies, market concentration, and exchange rate fluctuations further weaken price transmission to farmers.
In countries like Guatemala, stronger cooperatives have enabled better prices for growers. In contrast, places with fragmented supply chains often leave producers at the mercy of local buyers, limiting their ability to negotiate or plan.
Direct Trade: No Silver Bullet
Direct trade is often promoted as a solution, promising more equitable returns by bypassing intermediaries. While the model has merit—when executed properly—it’s not always more profitable or efficient. It demands logistics, transparency, and strong buyer-seller relationships. Many buyers lack the capacity to engage in such partnerships, leading to token gestures rather than meaningful supply chain reform.
Volatility Undermines Long-Term Investment
Even if incomes have improved slightly in the last 24 to 36 months, volatility remains the enemy of sustainability. Producers need price stability—not just high prices—to invest in their farms, improve quality, and adopt climate-resilient practices.
Without this stability, they face a dilemma: invest in their farm’s future, or play it safe and survive the next season?
Market shocks make long-term planning almost impossible. Inconsistent revenues discourage producers from improving infrastructure, experimenting with processing, or pursuing certifications. And while price spikes make headlines, the long-term effect is often increased uncertainty.
Policy and Private Sector: A Shared Responsibility
Structural change is urgently needed. While some countries like Honduras offer VAT exemptions and Peru provides concessional loans for farmers, more needs to be done. Governments must invest in national coffee strategies that address infrastructure, living incomes, and climate adaptation.
Private sector actors also play a role. Transparent pricing, longer contracts, and shared risk mechanisms can help build trust and stability in the supply chain. Roasters and importers must move beyond marketing buzzwords and actively contribute to more resilient sourcing models.
The Helena Coffee Perspective
At Helena Coffee Vietnam, we believe that transparency, traceability, and trust are the pillars of a sustainable coffee future. As green coffee exporters, we work directly with producers to ensure fair pricing and promote quality improvement through technical training and access to better processing tools.
Even amid price uncertainty, our OEM roasting services allow micro-roasters and retailers to bring high-quality products to market—without excessive overhead—while keeping the producer’s story front and center. We’re committed to building a supply chain where everyone thrives, from farm to final cup.
Final Thoughts
The narrative that high coffee prices equal high profits for farmers is deeply flawed. Without systemic reform, better infrastructure, and shared accountability across the supply chain, the majority of the world’s coffee producers will continue to bear the risks—while others capture the rewards.
The specialty coffee industry has long prided itself on doing things differently. Now is the time to prove it—by turning record-high prices into real, lasting change for those who need it most.
👉 Visit www.helenacoffee.vn or Info@helenacoffee.vn to explore our products and request a direct quote today!
Source: Perfect Daily Grind
