What is the C-Market and Why are Coffee Prices Going Up?

What is the C-Market and Why are Coffee Prices Going Up?

First, let me begin by stating that due to proximity and industry, I have knowledge of this topic, but I am no financial expert. My goal with this post is to provide some introductory knowledge and explanation of what is currently going on in the coffee market, as you may have been hearing (and feeling) coffee prices are increasing.

The C-Market, or commodity market, is the global exchange in which Arabic coffee is traded on futures contracts, dictated largely by supply and demand. Brazil is the largest producer and exporter by volume in the world. A brief, but far from comprehensive cliff note, is that since COVID (2020-2021) the coffee supply has been high and demand has dropped, making the whole market a bit whacky, giving us low prices. Then, fast forward to 2024, when the demand is increasing worldwide, but due to climate change, a drought cut short the growing season in Brazil, drastically reducing the supply. Enter now, where coffee’s popularity continues to soar but the number one volume exporter cannot meet the demand with supply due to weather-related natural factors. Still with me?

Since the supply cannot come close to the demand, the price increases, 70% over where it was 1 year ago. Since Brazil is the largest exporter coming into the 2025 season at a deficit, companies have to fill their volume quotas somewhere. So now, the worldwide demand is dictating what the suppliers can ask, as they should. 

What does this all mean for us? Well, coffee prices have been historically low, too low to sustain producers trying to keep up with the demand. So, prices should increase, though the pain point is for us as consumers, it’s 70% all at once, which can be difficult to manage. But we will, we always do. Where our cup of coffee increases by cents, our producing partners are dealing with issues like climate change, reduced labor forces (which cause them to spend more on less help), and market volatility. 

Final note: I hope this has been informative. As our global market continues to change, as we all deal with inflation and how to exist in our current market, know that we are dedicated to doing all we can to take care of each other. We want to pay our producers fairly, we want to pay ourselves fairly, and we want to charge a fair price for the coffee we all enjoy. We are navigating this in real-time. Thank you so much for being with us on this journey.

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