From 12 €/kg to 22 €/kg on the grocery shelf in less than one year
I have clients requesting why raw coffee is so expensive compared to four years ago, when people were at home and drank coffee all the time. Looking at the grocery shelf I could see the same coffee climbing from 14 € per kilogram to 22 € and then going back to 12 €/Kilogram for a special offer.
To answer my clients, I had to look past the grocery shelf and into the exchanges where prices are determined by the ‘Logistics of Time’—speculative contracts that bet on stories like climate change rather than the stable harvest cycle shown in my graph.
The prices for coffee beans – standard arabica – are quite volatile and not always justified. The prices are determined on exchange and it is possible to buy and sell contracts for future coffee and for difference in prices (CTDs). CTDS are not listed in the number of sold bags. Bags are a standard unit for coffee and about 60 kg. On its way from raw coffee to the grocery shelf the coffee goes through a roastery and looses about 20% of its weight. That tells that a seller needs at least 2-2,5 times the raw coffee price at the shelf to cover roasting, taxes, packaging, transporting and selling costs.
| Year | Approx. Price (€/kg) | Forensic Context |
| 2011 | €4.25 | Peak volatility; high logistics and supply chain friction. |
| 2013 | €2.32 | Prices reaching a bottom level. |
| 2018 | €2.50 | Strong supply surplus (the “186-million-bag” pressure). |
| 2021 | €3.82 | Post-pandemic logistics “Noise” and supply chain shifts. |
| 2024 | €4.80+ | Current volatility requiring Resilient Pricing to protect margins. |
| 2025 | € 7.55 | Stabilizing on high levels, futures are getting slowly cheaper |
I have a graph which includes harvested coffee beans and prices:
On the right side there is the price, which reached more than 8 € per Kilogram, and on the left side and in the light blue bars there is the amount harvested in the year, epressed in bags per month. The price for coffee fluctuated much more than the amount of harvested beans.
Would climate change make coffee more expensive or disappear
On January 24th 2024 the Economist, one of the leading journals for political economy wrote:
“But global warming threatens the world’s coffee supply. Temperatures are rising and rainfall patterns shifting across South America, central Africa and South-East Asia, where most of the world’s coffee is grown. By the end of the century between 35% and 75% of the coffee-growing land in Brazil, the world’s biggest producer, could be unusable, according to a recent paper published in Science of the Total Environment by Cássia Gabriele Dias, an agricultural engineer at the Federal University of Itajubá, in Brazil.”
The reports in many other journals and newspapers pointed in the same direction. Coffee drinkers are expected to stay with coffee and paying higher prices for a scarce good, not moving to beer, wine or tea.
How to make money with betting on raising or falling prices
To provide a Fact-Based Foundation for your coffee article, we can Reverse Engineer a classic futures trade. In the coffee market, speculation isn’t about the physical beans in a sack; it’s about the “Logistics of Time.”
Here is a comprehensible example of Short Selling—the strategy used when a speculator believes the price is currently anchored too high and will drop.
About Climate Change: I know that climate change is real. The only thing to discuss is how fast we will notice and what to do to live with it.
The Scenario: The “Climate Change fast” Hallucination
- Physical Reality: It is July in Brazil. A rumor of a “Climate Change fast” hits the market.
- The Reaction: Prices spike to $2.50/lb because of fear (Noise).
- Your Analysis: You look at the weather data and see the “Climate Change fast” didn’t actually hit the main growing regions. You realize the $2.50 price is a “Data Hallucination.”
The Move: Short Selling (Selling what you don’t own)
- The Contract: You “sell” 1 contract (37,500 lbs of Arabica) at the current high price of $2.50/lb.
- Total Value: $93,750
- The Wait: Two weeks later, the market realizes the “Climate Change fast” was a false alarm. The price drops back to the $2.00/lb equilibrium.
- The Cover: You “buy back” the contract at $2.00/lb to close your position.
- Cost to buy back: $75,000
- The “Bacon” (Profit): The difference stays in your pocket.
- $18,750 Profit (minus transaction fees).
Most coffee is traded by direct contract, sometimes long-term, between buyer and seller. Many contracts have the exchange price as anchor.
Here is a graph of the coffee traded and the prices for 2024 and 2025:
The Verdict: Speculation is just a bet on which “Story” will come true.
The following graph shows the amount of traded coffee and prices. While prices went up on a regular base, there was much more coffee traded than today – in the first chapter we saw that the real harvest was only about 5% less than in the years before and is expected to grow about 8% compared to 2018.
How prices stayed high after the end of speculation
The graph shows that at the time the coffee prices reached a certain level speculative demand collapsed. It was too dangerous for speculants.
