“There are over 200 studies on coffee and climate change – and none of them offer good news”, to quote Aaron Davies, botanist and senior research leader of Crops and Global Change at Royal Botanic Gardens Kew, from the opening segment of an extensive report by Nieuwsuur on Dutch national television. The world of coffee is experiencing a crisis that threatens its sustainability, impacting everyone from the smallholder farmers who grow it to the global consumers who rely on it daily.
“The morning routine of about a billion people is disrupted by climate change, as crops like coffee are sensitive to extreme weather. Experts fear that by the end of this century, between 35 and as much as 75 percent of the global coffee supply could be gone. This will make coffee scarcer, reduce its quality, and drive prices up.”
Updates
Nieuwsuur aired its 18-minute report the week after a surge in the price of Arabica beans that resulted from weather forecasts in Brazil. Over these last few months, we’ve addressed several current development in the world of coffee, the latest entry being an update in August, after record-high prices earlier in the summer. Another interesting read is “Greenhouses back in the picture as coffee crisis looms” by hortidaily.com.
With environmental challenges exacerbating production, the entire coffee supply chain is feeling the pressure. This crisis is complex and multifaceted, involving economic, environmental, and social factors that ripple through every part of the coffee trade. In this article, we’ll talk about what that means for farmers, traders and consumers.
Struggles of coffee farmers
Coffee farmers, especially smallholders in countries like Brazil, Colombia, Vietnam, and Ethiopia, are at the heart of the crisis. They are facing unprecedented challenges that threaten their livelihoods. According to the International Coffee Organization (ICO), the global coffee market has been under stress due to fluctuating prices and weather-related disruptions. In recent years, coffee prices have fallen significantly, leaving many farmers struggling to make a living from their crops.
While the price of coffee beans may fluctuate in commodity markets, it is the farmers who often bear the brunt of these price swings. In 2023, the ICO reported that the global coffee market faced a deficit of around 6 million bags of coffee due to adverse weather conditions, including droughts and frosts, particularly in Brazil, the world’s largest coffee producer. This deficit has driven up the cost of production for farmers who have to contend with rising input costs, including fertilizers, labor, and water for irrigation.
Arabica-bean futures hit a 27-year high this week, while futures for the lower-cost robusta reached their highest price since the ’70s. Still, in some cases, the cost of production exceeds the income generated from selling coffee, forcing many farmers to abandon coffee farming altogether or diversify into other crops, often less labor-intensive or more profitable. This trend has led to the abandonment of coffee farms in key producing countries, further exacerbating the crisis. The social impact is severe: poverty and the lack of economic security among coffee farmers is a contributing factor to the broader problem of rural migration. Young people, in particular, are leaving farming communities for urban areas in search of better job opportunities, which could lead to a future shortage of skilled labor for coffee cultivation. This undermines the long-term viability of the coffee industry and contributes to the global shortage of high-quality beans.
Environmental challenges
The coffee crisis is also driven by climate change and the increasing prevalence of diseases and pests that threaten coffee crops. Coffee plants are highly sensitive to temperature changes, and even small fluctuations in temperature or irregular rainfall patterns can damage crops.
In key coffee-producing regions, rising temperatures and changing rainfall patterns have caused significant crop losses, especially in regions like Central America and parts of East Africa. Brazil, which produces about one-third of the world’s coffee, has seen extreme weather events, including devastating frosts and droughts, that have severely impacted coffee yields. In 2021, Brazil suffered its worst frost in over two decades, causing extensive damage to coffee crops and pushing global prices upward. However, this spike in prices was temporary, and the long-term effect on farmers was a reduction in yields and higher costs for replanting and recovery.
In addition to climate-related issues, coffee farmers are dealing with diseases such as coffee leaf rust, a fungal infection that destroys coffee plants. The spread of coffee leaf rust in Latin America, particularly in countries like Honduras and Guatemala, has further undermined coffee production. Coffee leaf rust thrives in the humid conditions that result from climate change, making it harder for farmers to protect their crops. Pesticides and fungicides can help, but these come at a high cost, further eroding farmers’ margins. As a result, the sustainability of coffee farming is under increasing threat.
Commodity traders
Commodity traders play a crucial role in the coffee supply chain, influencing how coffee is bought, sold, and priced globally. One of the key issues for traders is the volatility of coffee prices, which are influenced by factors such as weather events, global supply and demand, and speculation in futures markets. In recent years, the market has experienced price instability, with periods of sharp price declines followed by sudden surges. This makes it difficult for traders to predict the long-term price trends, which in turn complicates contracts and risk management for everyone in the supply chain.
For traders, price volatility presents both opportunities and risks. On one hand, traders can profit from price fluctuations by speculating on future price movements. On the other hand, low prices, as seen in the aftermath of the 2021 price spike, can create a situation where coffee farmers struggle to survive, ultimately reducing the amount of coffee available for trade. Moreover, traders are increasingly under pressure to address issues related to sustainability and ethical sourcing. Consumers and retailers alike are demanding more transparency in the supply chain, and traders are expected to provide assurances that the coffee they buy is grown sustainably and sourced in a way that benefits farmers. This has led to the rise of certification programs such as Fair Trade, Rainforest Alliance, and Organic, which aim to improve the livelihoods of farmers and ensure environmental sustainability. However, these certifications can be costly for farmers and may not always be enough to offset the financial difficulties caused by low commodity prices.
Global consumption
The coffee crisis is not only affecting farmers and traders but also consumers around the world. While global coffee prices have experienced some volatility, consumers may not see significant price increases in the short term due to the complex nature of the coffee supply chain. However, in the long run, coffee shortages and price hikes are inevitable.
Consumers in wealthy countries, where coffee consumption is highest, may experience rising prices as coffee becomes scarcer or more expensive to produce. Specialty coffees, in particular, may see price increases as producers struggle to meet demand and maintain quality. Additionally, the cost of coffee may be passed on to consumers in the form of higher prices at cafes, coffee shops, and supermarkets. However, it is the lower-income consumers in coffee-growing regions who may be the most vulnerable. They usually are. In countries like Ethiopia, where coffee is not just a beverage but a key part of the cultural and economic fabric, price volatility and crop failure can create significant hardship.
Coffee is not just an export commodity; it is a source of daily sustenance for millions of people. When farmers can no longer make a living from coffee, it affects the broader economy and the availability of affordable coffee for domestic consumption.
The current coffee crisis is a multifaceted problem that affects everyone along the coffee supply chain. From farmers struggling to cope with low prices and environmental challenges to traders navigating the volatility of commodity markets, and finally to global consumers facing the possibility of higher prices and less reliable access to their daily coffee fix, the stakes are high. To address the crisis, there needs to be greater investment in sustainable farming practices, climate adaptation strategies, and fairer pricing systems that ensure farmers can make a living wage. Consumers, too, can play a role by supporting ethical coffee brands and demanding greater transparency in the supply chain.
Adaptation to new realities
There are more than 200 studies on coffee and climate change and all of them bring bad news, says Aaron Davis, coffee expert at the Royal Botanic Gardens, Kew – to quote from the Nieuwsuur reportsegment in the intro. Davis has been researching all things coffee for 30 years, including studying the forgotten species (and possibly one that could prove very useful in the battle against climate change).
The quality of coffee is eroding everywhere, says Davis. ‘Wherever I am – Africa, Madagascar, Asia – everyone is talking about changes in weather patterns. Some farmers are on the verge of quitting coffee. Because the climate has changed so dramatically.’ In Colombia, where more than half a million families grow coffee, there are problems with increasing intensity, confirms coffee farmer Edilson Idrovo, whose family has been growing coffee for decades. ‘You used to have a good harvest in April-May. You saved some for July-August, because those were the bad times.’
Now all times are uncertain, he says. ‘The weather is erratic – which doesn’t suit coffee. The climate affects the harvest and the growth of the beans. And if the winter harvest can fail just like that, you lose your whole production.’ For me, one of the biggest challenges is not so much about ‘are we going to have enough coffee’, but finding pathways to adaptation for those who depend on it for their livelihoods.”
