Global Coffee Prices Surge Over 30% in Q3 2025 Amid Trade Shocks

The global coffee market has witnessed a dramatic turnaround in the third quarter of 2025, with prices soaring by more than 30% after a turbulent first half of the year. This rally, fueled by trade tensions, supply disruptions, and shifting global policies, has once again drawn attention to the vulnerability of commodity-dependent economies like Nigeria.

At the start of July, coffee futures contracts were trading at around $3.01 per pound. Within weeks, they rebounded strongly, climbing to highs of over $3.90 per pound by early September. This sharp recovery followed a significant downturn in May and June, when values fell by more than 20% and briefly touched just above the $3.00 threshold. For much of 2025, the trend has remained largely bullish. Coffee had already gained nearly 19% in the first quarter, rising from $3.22 per pound in January to close March at $3.82 per pound before its mid-year decline.

The turning point came in early August, when the Trump administration in the United States announced a steep 50% tariff on Brazilian coffee imports. This move unsettled global markets, given that Brazil is the largest coffee producer in the world and the U.S. remains the largest consumer. The sudden policy shift raised fears about whether supply chains could withstand the disruption.

Márcio Ferreira, president of Cecafé, Brazil’s coffee exporters council, explained that the uncertainty sparked panic across the industry. Traders scrambled to secure contracts, fearing shortages and higher costs in the months ahead. The immediate surge in demand drove futures contracts sharply upward, and the momentum has carried into September. Analysts believe this market reaction is likely to remain in play for the rest of the year, depending on how trade negotiations unfold.

For many observers, the current price surge brings back memories of 2024, when coffee prices skyrocketed by more than 70% within a single year. Then, the rally was driven by severe drought in Brazil that devastated production levels. Starting in April 2024, prolonged rainfall shortages reduced yields across major Arabica-producing regions, tightening global supply.

The consequences were quickly felt worldwide. In Nigeria, retail prices for coffee products doubled within months. Nescafé’s popular “3-in-1” sachets, for example, rose from N18,000 per carton in 2023 to N28,000 in May 2024, and further to N34,000 by August of that year. Consumers and businesses were forced to adjust to the rapid escalation, with cafés and retailers passing costs directly to end-users.

Today’s situation mirrors that earlier episode in its scale, though the trigger this time is political rather than climatic. Instead of drought, tariffs and trade disputes are fueling anxiety across supply chains.

Arabica, the world’s most traded coffee variety, has been at the center of the price volatility in 2025. It opened the year on a strong note at $3.26 per pound and surged by more than 17% through January. The first quarter ended with solid gains, but a bearish wave in May saw prices plummet. By June, Arabica was down to $2.97 per pound, one of the weakest performances among coffee types.

The August tariff announcement completely reversed that trend. Arabica rebounded by more than 32% in just a few weeks, surpassing its earlier losses and regaining investor confidence. As of early September, it was still trending higher, supported by strong demand and speculative interest. Market analysts now suggest that if Arabica breaks the $4.30 per pound resistance level set in February, further upside could be expected. Such a breakout would reinforce bullish sentiment and potentially trigger additional rounds of buying.

For Nigeria, the implications of rising global coffee prices are significant. The country relies heavily on imports to meet local demand, and fluctuations in global prices quickly filter into retail costs. In 2024, households and small businesses bore the brunt of global shocks, and a similar trend appears likely this year.

Importers will face higher landing costs, which are expected to push up retail prices of popular brands once again. With the naira already under pressure in foreign exchange markets, the combined effect could make coffee less affordable for the average consumer. Businesses in the hospitality sector cafés, restaurants, and hotels may also struggle to absorb the rising expenses without raising prices.

Economists warn that such imported inflation could complicate broader efforts to stabilize consumer prices in Nigeria. Given the country’s large youth population and growing café culture, sustained increases in coffee costs could alter consumption patterns, forcing many to seek cheaper alternatives.

The outlook for coffee markets in the coming months will depend heavily on geopolitical developments. If the U.S. and Brazil fail to resolve their trade dispute, tariffs could remain in place, prolonging market uncertainty. On the other hand, any sign of compromise could ease investor concerns and potentially stabilize prices.

At the same time, environmental factors remain a wildcard. Weather conditions in Brazil and other producing regions will be closely watched, as any sign of drought or poor harvest could exacerbate the current supply tightness. The European Union’s new deforestation laws, which restrict imports linked to deforestation-prone areas, also loom as a potential disruptor for African exporters who may struggle to meet compliance requirements.

For now, the market remains on edge. With prices already up by more than 30% in the third quarter alone, the possibility of further gains cannot be ruled out. Traders are watching key resistance levels closely, while consumers in countries like Nigeria brace for the ripple effects of another year of expensive coffee.