• Roasters are under more financial pressure than ever; costs for green coffee, labour, packaging, energy, and equipment are steadily increasing.
• More roasters are relying on trade credit and asking to delay payments, often a common practice for large purchases of green coffee.
• But following rising costs related to the pandemic and 30% US tariffs on China, delayed payments now extend to packaging, equipment, and other services.
• The recent, although somewhat unsurprising, increase in delayed payments reflects a volatile financial landscape for coffee, but not a fundamental shift in how roasters operate.
• Looking ahead, building trust, clear communication, and flexibility will be vital to maintaining positive working relationships.

The global coffee industry is under increasing financial strain. As economic instability persists into 2025, roasters are navigating rising costs across every part of their operations – from green coffee to packaging, equipment, labour, and logistics. These cumulative pressures are not only squeezing margins but also leading many roasters to delay supplier payments beyond coffee purchases.

Postponing payment for large quantities of green coffee has long been part of doing business in the coffee industry. But today, the scope of deferred payments is expanding – signalling deeper liquidity issues and a growing reliance on trade credit as a cash flow strategy. 

While some roasters are delaying out of necessity, others may be using payment extensions as a means of short-term financing.

To learn more about how roasters are navigating financial strain, I spoke to Fran Lee at Café Imports Australia.

You may also like our article on whether sustainability has become less of a priority for roasters amid high coffee prices.

Why the costs of operating a coffee business keep climbing

Following a tumultuous upturn in late 2024, arabica coffee prices have continued their upward trajectory into 2025. According to the International Coffee Organisation (ICO), the ICO Composite Indicator Price (I-CIP) averaged US$3.45/lb in May 2025, reflecting a significant increase from previous years. 

This surge is the result of factors such as climate-related supply disruptions in major producing countries like Brazil and Colombia, ongoing logistical challenges, and fluctuating currency markets. But for many roasters, the financial challenge goes far beyond green coffee. 

“In my experience, many roasters are still feeling the aftereffects of the global pandemic,” says Fran Lee, the sales representative at specialty green coffee trader Café Imports Australia. “While things may look more stable on the surface, the financial impact lingers, especially for café owners and smaller roasting operations.”

In early 2020, up to 95% of out-of-home coffee businesses were forced to close – severely affecting operations and forcing them to adapt to the surge in at-home consumption quickly.

Although many roasters successfully navigated the pandemic by offering subscriptions, educational classes, and brewing equipment, the long-term economic repercussions of the pandemic have had major consequences on almost every global industry. Covid-19 triggered the largest global economic crisis in more than a century, according to the World Bank, and massively disrupted supply chains, driving inflation rates to record levels.

“On top of this, rising costs across the board, whether it’s green coffee, milk, rent, packaging, or labour, are tightening margins more than ever,” Fran adds.

Flexible packaging costs alone have risen more than 30% since mid-2022, energy expenses are predicted to increase by a further 7% throughout 2025, and labour costs continue to climb – adding more pressure onto roasters.

Shipping costs have also increased due to fuel price volatility, while global staffing shortages have raised the cost of hiring and retaining skilled staff. The result is that even profitable roasters are seeing tighter margins and are facing increasingly difficult choices when it comes to allocating cash.

Trade credit as a short-term fix

To manage an ever-widening range of financial constraints, more roasters are relying on trade credit – a business-to-business (B2B) agreement in which a customer can purchase goods without paying cash up front. They pay the supplier at a later scheduled date, usually 30, 60, 90, or sometimes 120 days later.

In the coffee industry, where roasters often purchase large quantities of green coffee at a time, delaying payments isn’t uncommon. But in the case of many roasters, delayed payments are no longer limited to green coffee but now extend to packaging, equipment, and other services. 

“Many roasters are operating on increasingly thin margins and are having to make tough decisions about how to prioritise their cash flow,” says Fran.

Equipment is a significant expense in the coffee industry. Professional espresso machines can easily cost upwards of US$20,000, while roasting machines can range from US$20,000 to US$150,000, depending on their size.

Following on from supply chain disruptions during the pandemic, shortages of raw materials like steel, aluminium, and plastics, as well as components like motors and chips, have made coffee equipment more expensive. Political volatility has also raised costs; the US government threatened China – the world’s manufacturing superpower – with steep 145% tariffs in early April 2025.

After trade negotiations, US-China import levies have since dropped to 30%. Although this represents an 80% decrease, the costs of equipment and parts manufactured in China, which supplies a large number of coffee equipment brands, have still increased as a result.

Impact across the supply chain

For roasters who need to upgrade their equipment, covering these large expenses has become less viable. Some may simply wait in hopes of tariff reductions or price drops, while others may request to delay payments, especially in cases where they urgently need new equipment.

This can provide short-term breathing room, but also pushes risk upstream to suppliers – and can be a result of delayed payment further downstream.

“One of the biggest issues seems to be cash flow. Many roasters are caught in a chain reaction, often waiting on delayed payments from their own wholesale partners before they can pay suppliers like us,” Fran says. “It’s a challenging cycle, often not due to bad intentions, but more a reflection of the broader financial strain across the supply chain.”

Extended trade credit is putting pressure on smaller suppliers like packaging and maintenance providers – especially as many of them rely on timely payments to manage their own costs and stay operational. 

“When payments drag out, it creates cash flow gaps that can slow down their work or limit how many clients these businesses can support,” Fran explains. “Having clear payment terms, open communication, and even partial upfront payments can really help keep things running smoothly on both sides.”

Building trust amid longer-term uncertainty

All signs indicate that price volatility won’t slow down anytime soon in the coffee industry.

Following the Trump administration’s 50% tariffs on Brazil – the world’s biggest coffee producer – the C price has continued to climb, reaching over US$3.47/lb in mid-August 2025.

Despite continuous efforts to exempt coffee from import levies and hints that an exemption may be on the cards, there has yet to be a final confirmation. 

A standard container of coffee, containing about 45,000 pounds of green coffee, now costs importers an additional US$15,000 to $25,000 immediately upon arrival. This sudden financial burden forces importers to reallocate funds from other parts of their operations or seek additional credit, impacting cash flow and leading to higher prices for consumers.

While Australia has been less directly affected by tariffs, Fran says the knock-on effects of global volatility are still felt. 

“Recent tariffs and global trade tensions haven’t impacted us as directly as they have in regions closer to and including the US,” she explains. “However, the added pressure on the already volatile C market has made roasters more cautious, prompting careful consideration of equipment upgrades and supplier relationships with every purchase.”

Some roasters are pausing investment in new machinery or packaging designs, waiting for costs to stabilise. Others are prioritising payments only to long-term partners or mission-critical suppliers. In some cases, suppliers are responding with more flexible terms to help maintain those relationships and keep operations running smoothly.

“Transparent relationships allow us to help the roasters, sometimes by offering flexible credit terms, some breathing room on one-off payments, or even working together on storage allowances and carry charges,” Fran tells me.

Decisions made in good faith

As margins remain thin and the cost of doing business continues to rise, most roasters are trying to navigate these pressures with honesty, integrity, and sincerity.

“The coffee industry is built on trust and strong relationships, and I genuinely believe most roasters want to do right by their partners,” Fran says. “Financially, they might be in a tough spot, but I believe a lot of passionate business owners and operators will adjust and work through this with stronger systems and sustainable sales practices put in place.”

Still, proactive measures are essential – particularly as more roasters move into higher-cost green coffee contracts. These can include optimising internal systems, updating pricing models, or maintaining strong, transparent communication with suppliers and partners.

“When it comes to green coffee, many roasters are still working through existing contracts. But with the C market remaining consistently high, they’ll soon be transitioning into much higher pricing,” she says. “These steps are key to building a sustainable and resilient business in today’s market.

“What works best for us is strong, open communication. When there’s a solid history and transparency around your needs or challenges, we’re better able to support,” she adds. “For example, let your supplier  know a particular payment will be delayed so they can expect it at a later date.”

The recent, although somewhat unsurprising, increase in delayed payments reflects a volatile financial landscape for coffee, but not a fundamental shift in how roasters operate. 

It’s clear that delayed payments are a direct response to current economic pressures rather than a permanent shift in behaviour. Still, the impact can be felt across the supply chain and is likely to have long-term repercussions.

Looking ahead, building trust, clear communication, and flexibility will be vital to maintaining positive working relationships.

Enjoyed this? Then read our article on why specialty coffee roasters need to find new ways to diversify.

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