Coffee Prices to Surge Again as Illycaffe Confirms Hikes

UPDATE: Coffee lovers brace for another price increase as Illycaffe SpA confirms plans to raise prices in January 2024. The Italian coffee roaster, known for its premium espresso, states that rising costs of unroasted beans are forcing them to pass on expenses to consumers.

In a recent interview, Illycaffe’s Chief Executive Officer, Cristina Scocchia, revealed that high coffee prices will continue to affect shoppers. Despite some easing in costs following the expansion of U.S. tariffs on Brazilian coffee, prices remain historically elevated. The surge is driven by reduced harvests globally and speculative trading, leaving consumers facing a grim outlook.

The cost of Arabica coffee beans hit record highs last month as tariffs on Brazil, a top exporter, compounded supply issues. While there was a slight decrease in prices after U.S. President Donald Trump expanded tariff breaks, they remain high. Scocchia stated, “There is a limit to how much a company can absorb a level of green coffee price, which is so unhealthily high.”

Illycaffe’s price hikes are part of a broader trend. Other coffee roasters are expected to follow suit as retail prices adjust to match commodity costs, which can lag by several months. Carlos Mera, head of agricultural commodity market research at Rabobank, predicts more increases in the coming months, indicating persistent pressure on consumers.

Looking ahead, Illycaffe forecasts that prices for unroasted beans will stabilize between $2.80 and $3 per pound by the second half of 2026. This projection is still above the average of the past five years, leaving many coffee enthusiasts wondering when relief will come.

Scocchia expressed disappointment over the lack of a more significant price drop, stating, “We were hoping for a much more dramatic drop.” The coffee industry is grappling with a “very, very difficult” situation, primarily due to unroasted bean prices driven more by speculation than actual supply shortages.

Despite these challenges, Illycaffe has maintained its sourcing strategy from Brazil, essential to its unique coffee blends. The company is also expanding its production partnerships in the U.S., which represents 20% of its turnover.

To mitigate costs for consumers, Illycaffe has absorbed much of the price increase within its margins, helping to sustain sales volumes. Remarkably, consumer demand for coffee remains strong, with expectations for growth at a single-digit rate.

As coffee prices continue to rise, the market is left to ponder the ongoing impact on daily coffee rituals. Consumers are urged to stay informed as developments unfold in the coffee industry, which remains in a state of flux.

Stay tuned for further updates as this story develops.