According to Caixin news on November 28 (editor Qin Jiahe), this Wednesday, due to concerns over global supply shortages coupled with uncertainties regarding the EU's deforestation-free regulation, the global price of coffee beans skyrocketed to the highest level in nearly 50 years.

In the New York market, the price of arabica coffee beans, one of the main coffee varieties, rose by 4.7% to $3.23 per pound, reaching a new high since 1977, with a cumulative increase of over 70% this year.

Traders believe that the buying spree by coffee roasters is a key factor driving the price increase. These commercial buyers are concerned about future supply shortages and are filled with uncertainty regarding the upcoming deforestation-free regulation. According to this regulation, companies will need to provide evidence to the EU that their coffee supply chain does not involve deforestation; otherwise, they may be banned from entering the EU market.

I have never seen such a situation,” said Tomas Araujo, a trader at stonex. “This is not a problem that can be solved this year; roasters have already started to panic.”

Climate change is exacerbating supply tensions.

As the largest producer of arabica coffee beans globally, Brazil experienced the worst drought in 70 years in August and September this year, followed by heavy rains in October. This extreme weather has further intensified worries about its coffee production.

Meanwhile, Vietnam, the largest producer of robusta coffee beans in the world, has faced supply shortages for three consecutive years, leading to a shortage of robusta beans in the global market.

Robusta coffee beans are primarily used to produce instant coffee, and their upward momentum is quite strong. The London futures price increased overnight by 7.7%, reaching $5,507 per ton, nearly double the price at the beginning of the year.

For the 2025-2026 Arabica bean harvest, the industry anticipates a decrease in production, a trend that may exacerbate the supply-demand imbalance in the global coffee market. Araujo stated that just as the industry hoped Brazil's coffee harvest could alleviate market pressure, the actual situation is that production will continue to decline in the future.

The EU's zero deforestation legislation.

In addition to the impact of weather, the upcoming EU zero deforestation legislation also poses a significant shock to the coffee market.

This legislation was proposed in 2022 and was originally planned to be implemented mandatorily by the end of 2024, requiring an investigation into seven agricultural products, including coffee, sold in the EU market. Suppliers must prove that their products were not produced on deforested land; otherwise, they may face fines and bans.

Although in October this year, the European Commission proposed to postpone the mandatory enforcement date of the regulation, there are still differences among member states, and the final plan may not be determined until mid-December. This policy uncertainty makes it difficult for the market to predict, and European importers and roasters are stockpiling raw materials in advance to avoid potential supply chain risks, further driving up coffee prices.

Concerns about tariffs imposed by the USA.

The market expresses concerns over potential import tariff policies to be implemented by the USA. The elected president, Trump, previously stated that after taking office, tariffs would be imposed on goods from countries like Canada and Mexico. Carlos Mera, head of the agricultural commodities department at Rabobank, stated that roasters believe coffee may be included in the scope of taxation.

"If you are a coffee roaster and believe that coffee will be subject to tariffs, then you would import in advance, otherwise you will have to pay tariffs later," said melra.

Melra also pointed out that with the continuous rise in global coffee prices, consumers will certainly face higher pressure on coffee prices. "Recent price increases are influenced by the earlier spike in robusta coffee prices, rather than due to the recent market rebound. Therefore, consumers will bear more in the future."