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Coffee prices have always been volatile, but that volatility has been turbocharged over the past few years. The arabica futures market, also known as the C price, hit record highs last year, and for most of 2025, coffee prices were well above $3 per pound.
But finally, the C price had been trending downward in recent months, due in part to the Supreme Court nixing President Trump’s tariffs and predictions of improved harvests in Brazil and Vietnam.
However, the C price rose again this month, climbing nearly 10% over the past week to close above $3 on March 20. Why are prices going back up?
It could be due to supply chain disruptions caused by the US and Israel’s airstrikes on Iran. In response, Iran launched strikes of its own and began blocking the Strait of Hormuz, a key shipping corridor.
“The Iran conflict might have a short term impact on Asian supplies, both from a logistics perspective due to rising shipping and transport costs and longer journey times, for example, as well as potentially higher fuel costs for Asian coffee growers,” Stephen Butler of commodities forecasting company ChAI told Rachel Arthur of Beverage Daily.
Retail prices are also trending upward. Ilena Peng reports for Bloomberg that the average consumer price for roasted coffee hit a new record in February, reaching $9.46 per pound. Katie Carguilo from Counter Culture Coffee told Peng that falling C-market prices would take months to filter down to roasters, who often lock in green coffee prices far in advance.
It’s not just roasted coffee: According to data from the restaurant payment provider Toast, Peng reports, the median price of cold brew and drip coffee rose 4% in February over the same month last year. In response, consumers are cutting back: a January National Coffee Association survey found that 61% of respondents had reduced their coffee spending, Marcelo Teixeira reports for Reuters.
What happens next is hard to say. However, some analysts told Reuters that they still expect the C price, which topped out at over $4 per pound in 2025, to fall to $2 or below by the end of this year as supply increases.
Read the full story on coffee’s continued volatility from Beverage Daily here.
Photo by Brandee Taylor on Unsplash
