Coffee crisis, climate emergency and costs raise prices and challenge producers

The climate crisis and rising costs are marking coffee production in America. As Colombia ramps up production, countries such as Peru, Costa Rica, and Honduras face challenges from extreme weather, high costs, and volatile markets.

Although international prices have risen, small producers struggle to make fair profits. In 2024, coffee prices have reached record highs, driven by extreme weather factors affecting major producing countries.

This landscape has reshaped the global coffee economy, benefiting some actors while challenging others. With a 70% increase in Arabica coffee prices, producers and consumers are in check.

The climate emergency has intensified challenges for major coffee-producing countries. While some have taken advantage of the price boom, others face structural and climatic difficulties threatening market stability. With this panorama, sustainability and innovation have become key to the future of global coffee growth.

The increase in coffee prices is mainly a consequence of droughts in Vietnam and Indonesia, as well as the frosts that affected Brazil in 2021 and 2022 and affected 35% of the South American country’s arabica coffee harvest.

Brazil – the struggling giant 

Brazil, the world’s largest coffee producer, faces an uncertain outlook. After recovering its arabica production with growth of 1.7% this year, the forecasts for 2025 are bleak. A five-month drought threatens to reduce the next harvest significantly.

According to Márcio Ferreira, president of the Council of Coffee Exporters (Cecafé), the reduction will be noticeable – “Most likely, next year’s production will be significantly reduced,” he says. In addition, pressure from hedge funds and new European legislation on deforestation have contributed to price volatility.

Colombia- resilience in the face of the challenge 

Colombia, for its part, reached record figures in 2024. The annual production of 13.41 million bags reflects a 21% growth compared to the previous year. Germán Bahamón, the manager of the National Federation of Coffee Growers, described these results as “a testimony of the resilience and adaptability of Colombian coffee growers.”

With revenues of 14.2 trillion pesos (3,200 million dollars), the coffee sector is consolidating itself as the country’s economic engine, boosted by increased coffee prices in the international market. “2024 has been a year of upward trend.

” We closed 2023 with a price of $1.88 per pound (…), and today, in November 2024, we celebrate a price of $3.18 per pound,” he stresses. However, Bahamón warns about the need to renovate coffee plantations and maintain fertilization policies to guarantee sustainability.

Mexico – a harvest hit by drought 

Drought has severely affected producers in Mexico in key states such as Chiapas, Veracruz, and Oaxaca. According to local testimonies, production has fallen by more than 50%. Moisés Ernesto, a producer from Chiapas, describes the situation: “The plant is green, but it does not have the coffee production it should have.” Although Mexico remains the world’s eighth-largest exporter, adverse conditions have jeopardized the stability of its crop.

Peru- strategies to counteract the fall 

The figures also reflect a decrease in Peru. With a production of 250,000 tonnes, the average yield fell to 658 kilos per hectare, significantly below the world average of 880 kilos. Factors such as yellow rust and aging plantations have affected yields.

The National Coffee Board (JNC) has called for urgent measures, such as renovating 50,000 hectares and creating a fund of 120 million soles ($32 million) to sustain production and support the country’s 200,000 small producers.

Costa Rica – moderate growth amid economic challenges 

Costa Rica expects an increase of 8.6% in the 2024-2025 harvest, reaching 1.75 million 46-kilo bags. Despite the improvement in international prices, internal situations are affecting producers and exporters, such as the fall in the dollar exchange rate by 25% since July 2022. Fluctuations in the exchange rate have generated complaints among producers, who face higher local costs with decreasing international incomes. Honduras—uncertain benefits in the face of high costs.

Honduras, with a projection of seven million quintals (317,800 tons) for the 2024-2025 season, faces high production costs that overshadow the benefits of international prices. “We are not getting what is fair,” said a producer from El Paraíso. Despite this, Pedro Mendoza, president of the Honduran Coffee Institute (IHCAFE), pointed out that the price increase could generate new employment opportunities, especially in the harvest.