Surprisingly, not all coffee exporters and producers are rushing to do business in a market of high prices.

The C price has been rising over the past few years, reaching record highs in the past four months and signalling a momentous shift in the industry that many consider long overdue. Since 1990, the price of coffee on the commodities market has only exceeded US $2/lb for around 48 individual months in total; roughly half of these have been in the last four years.

Although they seem lucrative, these high prices are causing many exporters and producers to move with extra caution. Current market volatility means that, should an exporter commit to future sales at fixed prices, they expose themselves to financial and sourcing risks down the line.

I spoke with Andrea Brito Núñez at Osito Coffee and Cacao, Thiago Cazarini at Cazarini Trading Company, and Thomas Pingen at Red Beetle Coffee Lab to learn more.

You may also like our article on how high coffee prices could go.

A “new normal” for coffee prices

In February 2025, coffee prices rose to their highest levels since the mid-1970s, ushering in a new era for the industry.

Climate-driven supply shortages are the primary driver of this price surge. Industry leaders have long sounded the alarm that global warming could lead to more of the world’s coffee-growing land becoming unproductive by mid-century. With more instances of El Niño and La Niña (complex weather patterns resulting from variations in ocean temperatures) occurring, harvests in Brazil and Vietnam – the world’s biggest coffee growers – have dwindled over the past few years.

Coupled with logistics problems – including the Red Sea Crisis, falling water levels in the Panama Canal, and global container shortages – it has become increasingly difficult to make sure enough coffee reaches its destination on time.

As a result, stockpiles of coffee around the world, especially ICE-certified coffees, have reached all-time lows. With many roasters running out of options for where and how to source their green coffee, there has been little option but to accept the prices offered, regardless of how high they are. 

This demonstrates a fundamental shift in the dynamics of coffee trading. Demand is significantly outstripping supply and growth expectations for the industry, and there’s little anticipation that prices will fall significantly anytime soon.

“I definitely think the new higher prices are here to stay and, most of all, represent that a new ceiling has been reached,” says Andrea Brito Núñez, the North American Sales Manager at importer and exporter Osito Coffee and Cacao.

These new prices are at least a balm for producers who have been forced to accept low pricing for over three decades. However, the idea that many producers are now in a wholly better position is not universally true.

Some coffee growers have seen smaller harvests, meaning that the new prices may make up for some loss, but won’t cover it in full. Others are stuck in long-term contracts or arrangements with intermediaries that see them receiving only a fraction of the new prices. Some sold all their inventory long before the market rose, meaning that they missed out on higher prices altogether.

Exporters are navigating new challenges

On the surface, sustained high coffee prices appear to be gainful and profitable for exporters, but the reality is more complex.

“Many exporters are struggling with cash flow and producers haven’t been selling much coffee lately, which makes buying volatile,” says Thiago Cazarini, the owner of Cazarini Trading Company in Brazil. “To make money, you need money.”

Similar to the position that many importers and roasters are finding themselves in, exporters increasingly don’t have access to the funds they need to purchase coffee at the new higher prices. While they may be able to continue to do business, if their cash flow doesn’t increase proportionally to the rising costs of coffee, they can only purchase and re-sell a fraction of the volumes they were previously able to move.

“Access to credit and capital is tighter than in recent years because there is so much risk in moving coffee,” says Andrea. “There is a lot of uncertainty on a global scale.”

New volatility means that if an exporter commits to future sales at fixed prices, they expose themselves to rising costs and the inability to source coffee below the agreed price with the buyer. 

Normal methods to reduce risk, like hedging contracts, have become prohibitively expensive, with margin calls on contracts being the primary reason to avoid these practices. This is when the equity on an account (the total capital deposited, plus or minus any profits or losses) drops below the margin requirement, forcing brokers to sell some or all of the holdings to meet the minimum requirements. In some cases, this can lead to forced liquidation.

This issue is exacerbated in places where pre-financing is required. Thomas Pingen, the founder of Red Beetle Coffee Lab in Mexico, tells me that many Oaxacan producers, for instance, are not part of a cooperative and have no access to banking or credit. In turn, they require pre-financing, but these costs are now far higher for exporters, further reducing the volumes they can purchase.

Market uncertainty persists

With coffee prices unlikely to fall significantly in the coming months, exporters are moving with noticeable trepidation. There’s a sense that buying coffee now could mean making the wrong decision down the line, while a pervading fear of misjudging the market is leading some traders to simply not act at all. 

Another key factor that is shaping the current market is coffee producers cancelling contracts with exporters at the last minute, also known as strategic defaulting. 

“Defaulting hasn’t been widespread, but there have been a lot more occurrences,” Thiago says. Although it may lead to short-term gains, defaulting often damages relationships with traders and roasters, which can eventually lead to blacklisting.

Instead of selling to exporters for international shipping destinations, the local market is proving more attractive for many coffee farmers. 

“Local prices are very high in many countries at the moment, and this is a huge incentive for selling locally,” Andrea explains. “It’s faster in many ways, less expensive, and logistically less complicated.”

Naturally, this is reshaping roaster buying behaviour in a number of producing countries. 

“There is a very strong domestic demand in Mexico,” Thomas says. “Mexican roasters usually import coffees from Vietnam and Brazil, but the prices for those origins are now very high, so they prefer to work with local producers, further driving up prices.”

In other cases, producers choose simply not to sell but to hold their coffee as a form of savings. After the C price rose to over US $4.40/lb in mid-February, some farmers believe that if they hold out, they may be able to secure a similar or even better price down the road.

Impacts across the supply chain

The pressure on roasters and traders alike has never been greater, and as a result, all industry actors are choosing strategies that may be unfamiliar, and therefore more risky, to them. Some buyers are opting to live “hand to mouth” – purchasing only what they need for a short period of time, such as a few weeks or a couple of months, in the hope that when they next need to purchase coffee, the prices will have dropped. 

Other traders and roasters are choosing to purchase as much coffee as possible now, fearing that the C price may go even higher in the coming months, and using complex commodity trades such as “backwardation” to secure lower pricing.

With large exporters like Cafebras and Atlantica recently filing for bankruptcy, many are asking if market uncertainty is posing an existential crisis for traders and roasters alike.

Likely, the key to weathering this storm will be strong relationships, trust, and respect in the supply chain. Where exporters and roasters know their partners personally, they are less likely to face unexpected defaulting on contracts or unreasonable demands for price hikes.

In certain instances, producers who can afford to will honour prices agreed before the market spike, recognising that the long-term benefits of a regular purchaser, who values their work in both “good” and “bad” years, are greater than a single year with higher profit margins. 

Roasters who have strong direct trade partnerships with traders or farmers are also more likely to get the offers they hope for. Buying from a number of different partners without cultivating mutually beneficial relationships may leave roasters more exposed than before. 

The same agility and dynamism in purchasing that may help a roaster navigate higher prices for the next three to six months, searching around for the best deal, could ultimately undermine longer-term security in the supply of coffee.

The wave of consolidation impacting the green coffee trading sector is a signal that further challenges are to come.

Regardless of how exporter, importers, or roasters choose to work in this new era for coffee, it’s likely that we will all have to come to terms with a world where higher, and therefore fairer, prices are the “new normal”.

Enjoyed this? Then read our article on why record coffee futures doesn’t necessarily mean producers are “price makers”.

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