Coffee prices could fall in the wake of cocoa

Following a sharp rise in prices, the global coffee market is beginning to follow in the footsteps of the cocoa market. In the near future, coffee could follow the same pattern: first, record prices due to harvest problems, and then a sharp decline as buyers start to cut back and the market gains hope of a resumption of supplies.

Reuters reports this, citing discussions at the National Coffee Association’s annual conference in Tampa.

The publication notes that by the end of 2024, cocoa prices in New York had soared to an all-time high – over $12,000 per tonne – due to poor harvests in producing countries. But in less than a year and a half, the market has plummeted by more than 70%: consumers have cut back on buying expensive chocolate, whilst manufacturers have started reducing pack sizes and looking for cheaper substitutes. It is precisely this example that is now being cited as a potential warning for the coffee market.

The situation with coffee is unfolding in a similar way. Arabica prices rose sharply following weather problems in tropical countries, with prices peaking in February 2025. The market was further destabilised by trade distortions linked to Donald Trump’s tariff policy.

But in 2026, sentiment began to shift: market participants are expecting a recovery in production in Brazil, the world’s largest coffee producer, and this is putting downward pressure on prices.

Coffee is still expensive, but many analysts are already debating how sharply the market will fall. Reuters cites estimates suggesting that the price of Arabica in New York could drop to $2 per pound by the end of the year, with some even forecasting $1.80 per pound. By way of comparison, the market closed at around $2.93 per pound on Tuesday.

The main reason is not only the upcoming harvest but also consumer fatigue with high prices. According to a January survey by the National Coffee Association in the US, 61% of respondents have already started cutting back on coffee: they visit coffee shops less often, drink at home more frequently, or switch to cheaper brands.

The market itself is reacting to this too. More expensive mild Arabica varieties, particularly Colombian and Central American coffee, are losing market share, whilst cheaper Robusta is gaining ground.

However, not everyone in the industry believes that coffee prices will fall. Cocoa has proved more vulnerable to a decline in demand, whereas coffee remains a daily staple for millions of people. Rabobank, for example, says that demand for coffee in 2025 has effectively stalled, but has not collapsed, and in 2026 it may rise again by around 2%. This is weaker than pre-pandemic rates, but still does not look like a collapse.

Furthermore, one factor working against a fall in prices is that even if Brazil harvests a record crop, this does not mean that the entire volume will hit the market immediately. According to traders, Brazilian farmers currently feel financially secure enough to sell their grain gradually, rather than dumping large volumes all at once. In other words, supply will increase, but not necessarily so sharply as to trigger an immediate collapse.