Is the 2024–2025 price spike a weather shock or a structural repricing?
Osiria Research · Coffee & Commodities Note · June 2026
Coffee spent 2024 and 2025 trading at levels not seen in a generation. On the ICO Other Mild Arabica indicator, the ex-dock benchmark climbed from $5.08/kg in May 2024 to a peak of roughly $9.05/kg (reached in both February and November 2025), a 78% advance at the high. Even after the subsequent retreat, March 2026 prints near $7.37/kg (~$3.34/lb), still about 45% above where the move began two years earlier. The central question for buyers and policymakers is whether this is a passing weather episode or evidence that the price level itself has been permanently reset.
The move in numbers
The arabica and robusta benchmarks tell deliberately different stories, and the divergence is the most important clue in the data.
Robusta surged 44% to a February 2025 peak and then fully retraced, finishing the period marginally below where it started. Arabica spiked harder but has held a large premium to its pre-2024 base. A move that reverses cleanly looks cyclical; a move that resets to a higher floor looks structural. Coffee shows both signatures at once – in different beans.
The cyclical case: weather and the biennial cycle
The near-term drivers are textbook supply shocks. The 2024–2025 rally was propelled by Brazilian drought and frost risk, adverse Vietnamese weather, multi-year lows in global stocks, and shipping disruption. None of these is permanent. Brazil’s arabica also runs a natural biennial on/off yield cycle, so a poor year is typically followed by recovery.
Coffee’s supply chain is structurally slow to respond, which exaggerates each shock. Trees take three to four years to bear, the crop year runs October–September, and growers cannot ramp output mid-cycle. When a deficit appears, price – not volume – does the adjusting, and it does so violently. The global balance has sat in a slight deficit against demand of roughly 170–178 million 60-kg bags, leaving no buffer to absorb a bad harvest. That is a recipe for a sharp, but ultimately mean-reverting, spike – exactly what robusta delivered.
The structural case: a shrinking growing belt
The harder argument is that climate is lifting the floor under arabica specifically. Arabica is the higher-grown, more climate-sensitive species (~55–60% of world output); it needs cool, stable highland conditions that warming is steadily eroding. World Coffee Research projects the area suitable for arabica shrinking as temperatures rise and weather grows more erratic, absent large-scale varietal and agronomic adaptation.
If climate were merely noise, arabica would have retraced like robusta. Instead it has held roughly +45%. The market is paying a persistent premium for the bean whose growing belt is contracting.
That asymmetry is the tell. Robusta – hardier, lower-altitude, more adaptable – round-tripped its entire rally. Arabica did not. The simplest reading is that traders have repriced a higher probability of recurring arabica shortfalls, so each weather scare now resolves to a higher resting level than the last.
Osiria’s read: a cyclical spike riding a structural uptrend
The evidence does not force a binary answer, and the honest conclusion is that both forces are operating. The violent 2024–2025 amplitude was cyclical – weather, stocks, and freight – and is already unwinding, most visibly in robusta. But the elevated base that arabica refuses to surrender is consistent with a structural repricing of a climate-constrained crop.
For an operator across roasting, cafe, importing, and research, the planning implication is that the old long-run anchor is probably too low. Treat sharp spikes as cyclical and fadeable on the hedging book, but budget green-coffee costs to a structurally higher arabica floor, and expect the arabica-robusta quality spread to widen as the substitution pressure described in our climate note intensifies.