Coffee Supply & Market Conditions

Since 2007 we’ve been pushing the boundaries of providing high-quality, ethically sourced and perfectly crafted coffee.

It all began back then in a chicken shed, roasting on our hand-restored vintage Probat roasters, Betty and Bertha.

Today we're still dropping some of the best speciality coffee roasts in the UK.

Since day one, our mission has been to Make Coffee Better.

Better for growers.

Better for communities.

Better for planet.

And better for you.

In recent years our beloved industry has faced an increasing number of challenges.

Some of them are familiar to us and we’ve learned how to mitigate their impact, finding ways to innovate. To evolve and thrive.

But a number of them are new, unchartered, unprecedented.

The challenges are global. Leading to never-before-seen increases in the cost of producing coffee.

Factors such as climate change, disruptions in the supply chain, increased demand for sustainable practices and rising labour and material costs have all played their part.

The bottom line is that it has never cost more to roast fresh speciality coffee than it does right now.

But the conversation doesn’t end there. I want to take a moment and open up a broader conversation, laying bare some of the challenges that the industry is facing, and being open about what the global marketplace looks like.

The rising-price landscape.

The price of arabica coffee is and has been rising consistently over recent years, and, right now it’s hard to predict where it ends. On 16 September, arabica futures (contracts for the physical delivery of green coffee) reached their highest levels in 13 years. This year alone, prices have increased by 40% as dry weather conditions in Brazil continue to exacerbate global supply shortages.

In its simplest form, the price of coffee is determined by supply and demand:

• If there is a shortage of coffee, the price will go up.
• If there is a lot of coffee available, the price will fall.

Coffee supply and demand is affected by a multitude of factors which, ultimately, influence the market price for coffee.

Below are some of the more significant factors.

By explaining them with more transparency, hopefully the whole coffee community - growers, roasters, cafe owners, baristas, consumers - can engage in an open conversation about the true value of coffee. This thing that we all so dearly love.

1. Supply concerns.

Natural disasters, poor harvests, and labor shortages in coffee-producing countries have led to lower production, creating supply constraints. With less coffee available, prices tend to rise.

In particular, excessively dry weather in Brazil and Vietnam, the world’s two biggest coffee producers, is creating supply shortages, and driving up international market prices.

2. Climate change.

Climate change has driven the rapid rise in coffee prices in recent years.

As global temperatures increase, weather patterns have become more complex and unpredictable, leading to a significant drop in coffee production. This disruption in supply has triggered price surges worldwide.

For instance, prolonged droughts across parts of South America are a significant factor in the global supply shortage.

3. Increased consumer demand.

The price of coffee, both arabica and robusta, is largely determined by supply and demand. Essentially, if global coffee supplies are limited, prices will increase with demand.

Global coffee consumption continues to rise, especially in emerging markets where coffee culture is growing. As demand increases but supply remains constrained, prices naturally go up.

4. Inflation.

Inflation has driven up coffee prices by increasing costs at every stage of production. Rising expenses for labour, materials, and transportation, coupled with higher shipping and logistics costs, have strained coffee producers.

In coffee-growing regions, inflation has also led to currency devaluation, forcing producers to charge more for their beans.

5. Sustainability.

Sustainable coffee certifications require producers to meet quality standards, ensure fair wages for labour and maintain their farm's environment. However, they don't receive external financial support, relying primarily on their own resources. As a result, these expenses are factored into production costs, leading to higher coffee prices.

In the face of rising costs and unprecedented challenges, the coffee industry is navigating through uncharted waters. From climate change to supply shortages, every stage of the coffee production process has been impacted. But with these challenges comes an opportunity for growth and innovation.

By fostering transparency and engaging in meaningful dialogue, we can continue to support sustainable practices and ensure the true value of coffee is recognised.

Together, we can continue to Make Coffee Better

Team Extract