American coffee enthusiasts hoping for price relief will need to brace themselves for continued high costs, as recent tariff reductions have failed to bring the expected reprieve from record-setting coffee prices.
Global Supply Issues Drive Record Costs
The situation remains challenging despite policy changes. The cost of Arabica coffee beans surged to a record high last month, coinciding with U.S. tariffs on Brazil, the world's top coffee exporter, and disappointing harvests worldwide. Although prices have moderated slightly since President Donald Trump expanded tariff exemptions for Brazilian coffee, they continue to hover at historically elevated levels that concern both industry leaders and consumers.
Cristina Scocchia, Chief Executive Officer of premium Italian roaster Illycaffe SpA, expressed disappointment with the market response. "We were hoping for a much more dramatic drop," Scocchia revealed in a telephone interview, describing the coffee industry's current predicament as "very, very difficult."
Price Increases Continue Despite Tariff Changes
The persistent high costs are forcing companies to take action. Illycaffe, known for its premium espresso sold in distinctive silver-and-red cans, plans to implement another price increase in January, following two previous hikes this year. The company has attempted to shield consumers by absorbing significant cost increases within its profit margins, but Scocchia acknowledged there are limits to this strategy.
"There is a limit to how much a company can absorb a level of green coffee price, which is so unhealthily high," Scocchia stated, referring to the surge in unroasted bean costs. "We'll increase the price in all the countries and in all the channels."
Industry-Wide Impact and Future Outlook
Illycaffe's pricing moves are likely to be mirrored across the industry. Carlos Mera, head of agricultural commodity market research at Rabobank, explained that consumer prices typically lag behind commodity costs by "many months" or sometimes up to a year. He anticipates seeing more price increases in the coming months as the market adjusts.
Despite the challenging environment, coffee demand has shown remarkable resilience. Illycaffe has actually seen sales volumes increase, and the company expects the broader market to continue growing at a single-digit rate. The company maintained its sourcing from Brazil even during the tariff period due to its unique blending requirements.
Looking ahead, Illycaffe predicts prices for unroasted beans will stabilize between US$2.80 to US$3 per pound during the second half of 2026. While this represents some improvement from current levels, it still remains above the five-year average, suggesting that the era of inexpensive coffee may be over for the foreseeable future.
Scocchia attributed the sustained high prices more to market speculation than actual supply constraints, indicating that fundamental market dynamics may take considerable time to normalize despite policy interventions.
