Climate change, political headwinds and diverging market dynamics around the world have pushed coffee prices to fresh records, jacking up the cost of your everyday brew or a barista's signature macchiato, AFP reported.
While the current hot streak may calm down in the coming months, experts and industry insiders expect volatility will remain the watchword, giving little visibility for producers -- two-thirds of whom farm parcels of less than one hectare (2.5 acres), added the Paris-based international news agency.
Meteoric rise
According to a recent news report prepared by AFP, the price of arabica beans listed in New York surged by 90 percent last year, smashing on December 10 a record dating from 1977 -- $3.48 per pound. Robusta prices have seen similar growth, though prices are lower for the less premium coffee variety.
Fears of poor harvests after droughts in key producers Brazil and Vietnam, respectively the biggest and second-biggest sources of the beans, fuelled the price hike, added the report.
Demand has outstripped supply for several years now, prompting a flurry of speculative buying that further drove up market prices.
According to AFP, Donald Trump's threat of punishing trade tariffs on a range of goods adds another level of uncertainty. A top advisor to his predecessor Joe Biden warned in December that food items like coffee would likely be affected.
Climate threats
Arabica beans, grown at higher altitudes, are at greater risk from climate change since only a few countries, notably Brazil, could move farms further uphill as the world gets hotter, the news report stated, adding, Robusta can thrive in a wider range of growing conditions but is less prized by consumers.
According to the US Department of Agriculture, around 175 million bags -- 60 kilogrammes (132 pounds) each -- are expected to be produced in the 2024-2025 growing season including 56 percent arabica and 44 percent robusta.
Guillaume David at France's CIRAD agricultural research and international cooperation agency told AFP that both varieties are exposed to new risks in their intertropical growing zones such as late-season frosts, rains at the wrong time and beetle infestations.
"This year we saw these risks in Brazil and Vietnam, whereas before it would be in one or the other," AFP quoted David as saying.
Brazil grows 40 percent of the world's coffee, followed by Vietnam (17 percent), Colombia (7 percent), Indonesia (6 percent) and Ethiopia (5 percent) followed by Uganda, India, Honduras, Peru and Mexico.
In Africa, Togo or Ivory Coast could again start growing coffee after it was largely replaced by cocoa, or Kenya could replace part of their avocado plantations, David said.
According to AFP, demand has expanded beyond the traditional markets of Europe and the Americas to make inroads with tea-drinking Chinese. Demand in Europe meanwhile slipped last year, with Germany for example seeing a one percent decrease.
Despite the recent price surge, millions of growers cultivating coffee on small farms still live in poverty in developing countries, added the report.
They have little leeway to set prices in a global commodity market dominated by a handful of multinational processors and distributors.
According to AFP, even fair trade programmes to guarantee a living wage affect just five percent of the market -- 80 percent of the world's coffee is bought by heavyweight brokerage firms.
A sharp drop in prices could lead growers to abandon their plants, jeopardising their future revenues, said Nicolas Eberhart of the French food cooperative Ethiquable.
In October, the Group of 7 nations endorsed a Global Coffee Sustainability and Resilience Fund, aimed at spurring private investments to improve productivity and get more money into growers' pockets, the report further stated.
