Lavazza warns climate shocks and trade measures could keep coffee prices high until 2026

Coffee industry executive Giuseppe Lavazza told The Mail on Sunday that a combination of climate-related crop damage, recent trade measures and market dynamics has produced a “perfect storm” that will keep global coffee prices elevated and could translate into higher retail prices for consumers through at least mid-2026.

Lavazza, president of the Turin-based roasting company Lavazza, said the industry needs a strong Robusta harvest in Vietnam this November and a large Arabica crop in Brazil next year before prices can be expected to ease. He warned the situation was driven “not by market dynamics, but by political choices,” referring to a 50% tariff on Brazilian coffee announced by the White House last month.

Global benchmark prices have surged since 2023. From the start of 2023 to the end of 2024, Arabica prices rose about 190% and Robusta roughly 263%, according to figures cited during the interview. Arabica reached an all-time high in February of this year, topping more than £3 per pound compared with roughly 80p per pound before the COVID-19 pandemic. Industry analysts and some coffee companies now warn that higher costs could push everyday café prices upward in some markets.

Industry and market drivers cited by Lavazza and producers in Brazil include extreme weather linked to climate change, new environmental rules in the European Union, disruptions in maritime logistics and speculative trading in commodity markets. Lavazza estimated that about three-quarters of international coffee trading is speculative rather than driven by physical demand from producers and roasters.

Brazil is the world’s largest coffee producer, accounting for roughly 38% of global output, and producers there have experienced a string of damaging events. A severe frost in 2021 reduced yields and another cold snap in 2024 compounded losses, while shifts in seasonal rainfall have alternately brought too much and too little moisture. Those conditions have affected flowering and bean development on plantations in key growing regions such as Minas Gerais.

EU proposals to restrict imports of commodities grown on newly deforested land have also increased uncertainty among exporting countries. Producers and industry representatives say the pending legislation is intended to curb deforestation but has prompted concerns about compliance, traceability and additional costs across long supply chains.

Logistics strains have a separate, well-documented history of disrupting coffee shipments. The 2021 blockage of the Suez Canal by the container ship Ever Given is frequently cited by traders and producers as an example of how single chokepoints can ripple through coffee flows from producing regions in Southeast Asia to consuming markets in Europe and beyond.

Small and medium-sized producers visited by reporters in Brazil described continued farm-level activity despite the market stress: mechanical harvesters and hand pickers were at work on farms where quality control teams test multiple brews from each bag before export. Producers said they had never seen the extent of recent price volatility, and some warned that higher prices could attract new entrants to coffee cultivation while altering traditional family-run operations.

Consumption patterns in importing countries have begun to reflect the price shock. Lavazza said coffee drinking, which typically grows by 1 to 2% annually, fell by 3.5% last year. In the United Kingdom, where younger consumers have shifted preferences from tea to coffee, survey data cited in the report showed coffee and tea near parity in daily consumption. Lavazza and other industry figures said sustained price increases could further depress demand.

Traders on financial markets have contributed to price swings, according to industry statements. Commodity contracts are often bought and sold by investment funds and banks that do not take physical delivery of coffee, a structure producers say can amplify price volatility and detach futures prices from on-the-ground crop conditions.

Lavazza outlined a possible path back to lower prices: a healthy Robusta harvest in Vietnam later this year followed by a strong Arabica harvest in Brazil by June 2026. Until those supply increases materialize, he said, consumers and roasters should expect continued pressure on costs.

The Lavazza company dates to the late 19th century and remains a family-led roaster with global retail and distribution operations. Giuseppe Lavazza framed his visit to Brazilian farms as a return to the origins of the business and highlighted the meticulous quality checks that precede export shipments.

Analysts noted the combination of structural and episodic factors in the market. Climate-related yield losses reduce available supply, regulatory changes alter trade flows and compliance costs, logistics incidents create short-term disruptions, and speculative trading can magnify price moves. Taken together, those elements have produced what industry figures describe as an unusually protracted period of price stress.

Retail-level outcomes will vary by market and company. Some cafés and chains have already raised prices to offset higher wholesale costs, while others have pursued promotional or product-mix strategies to maintain customer traffic. Industry leaders say the best near-term indicator of easing pressure will be observed in harvest reports from Vietnam and Brazil.

Independent market analysts, producer associations and governments will continue to monitor yields, trade policy developments and futures-market activity as they assess when and how prices will normalize. For many producers and roasters, the immediate challenge remains balancing investment in long-term resilience—such as climate-adaptive farming practices and traceability systems—with the short-term impact of volatile prices on households and businesses in consuming countries.