The global coffee market is undergoing a significant change, with experts predicting a 15-20% drop in prices due to an oversupply of Arabica.
Yakov Yakubovich, an expert of the Institute of Fundamental Problems of Socio-Humanitarian Sciences of the National Research Nuclear University MEPhI, shares with RuNews24.ru his opinion on the causes and possible consequences of this situation.
One of the main reasons, according to Yakubovich, is the overproduction of arabica.
“Brazil, the world's largest coffee producer, harvested a record 66 million bags of coffee in the 2024/25 crop year,” the expert explained.
This represents a 15% increase over the previous year, thanks to the introduction of more resistant varieties and the expansion of plantings in Minas Gerais.
Demand, especially in regions such as Europe and China, is slowing down due to economic instability. This has created a surplus on top of already increased production. Jacob Jakubowicz also emphasizes that other coffee varieties have not been able to balance the market.
"Vietnam, the main producer of Robusta, faced an El Niño-induced drought, which reduced its exports. Although the situation has improved this year, it is still not enough," the expert notes.
Despite the growing amount of coffee, Jakubowicz notes several factors that have cooled consumer interest.
“Inflation has forced consumers in the US and EU to save money - they have started to switch from coffee shops to home coffee or cheaper alternatives,” he says.
A similar trend has been observed in Russia, where coffee has become part of the subculture.
He also emphasizes that seasonal factors affect demand. In summer, people traditionally consume less espresso and cappuccino, favoring cold drinks.
“New trends such as matcha and bubble tea are becoming increasingly popular among young people, which also changes consumer behavior,” the expert adds.
According to analysts' forecasts, the cost of arabica on exchanges may fall to $290 per 100 pounds (about 700 rubles per kilogram). However, end consumers are unlikely to notice a sharp drop in prices in coffee shops.
“The chains prefer to maintain margins, compensating for other costs,” notes Yakubovich.
At the same time, mass-market ground and bean coffee may become 5-10% cheaper at retail.
As always, weather remains a significant factor.
"If the El Niño phenomenon hits crops again in 2025-26, prices could rise again. In addition, geopolitical crises could affect logistics and lead to higher prices."
In the short term, the expectation is that coffee is likely to fall in price, but not radically.
“Given the inertness of this crop, we are unlikely to see a noticeable sort of price hike in retail sales,” concludes Yakov Yakubovich.
We will follow the developments in the world of coffee and its impact on consumers in the coming months.