Coffee prices continue to climb: Here’s why

Your morning cup of joe is getting expensive. The retail price of ground coffee in the US hit $7 per pound in January, up from $4 in 2020, and more increases are coming, warn analysts.

Why are prices rising?
Climate disasters like drought, frost, and flooding in major coffee-bean-producing countries like Brazil and Vietnam have slashed supply.

In China, a country known for its tea culture, coffee demand has skyrocketed 150% in the past decade, further tightening supply.

Geopolitical tensions, like Yemen’s Houthi rebel attacks on ships passing through the Red Sea and Suez Canal, have slowed shipping, delaying the supply of 4 to 5 million bags of coffee to Europe. Cargo ships are taking longer routes to avoid conflicts, increasing import costs.

Potential tariffs proposed by President Donald Trump, like the 25% duty on Mexican coffee, could push green bean prices from $5.50 to $6.88 per pound, forcing retailers to charge almost $8.75 for a pound.

What’s next?
Industry experts see coffee prices rising another 25%. A recent Bank of America analysis found Folger’s and Keurig could also increase their price tags.

Meanwhile, many Americans are turning to budget-friendly coffee hacks, like bringing their oat milk to cafes and ordering espresso shots to mix and make coffee. Others are turning to making cold brew at home or stretching their beans.