The International Coffee Organization (ICO) pointed out that after the U.S. election saw Trump win, the dollar continued to strengthen, leading to a sharp increase in operating costs for coffee industry players. As a result, international coffee market prices reached the highest point in 47 years in December 2024.
According to the latest report from the ICO, the stronger dollar has increased costs for coffee importers and roasters, adding operational pressure and forcing these businesses to pass on the increased costs to the end consumers.
Latin American coffee-producing countries have also seen reduced production due to droughts, coupled with port congestion and logistics issues, which means coffee prices will continue to rise this year.
Besides the supply chain issues, extreme weather conditions like droughts and hurricanes also impact Central American coffee-producing countries, with Honduras and Nicaragua being hit the hardest. Compared to 2023, Honduras's coffee exports last year decreased by 57%, while Nicaragua's dropped by 26%.
The ICO estimates that factors like hurricanes, droughts, excessive rainfall, labor shortages in producing countries, plant pest and disease, and the rising costs of fertilizers, fuel, and labor will all lead to reduced coffee production, further pushing up prices.