Global Coffee Price Surge Threatens €1 Espresso in Portugal

The price of a morning espresso is edging higher for Portuguese households, and the explanation lies far beyond the café counter: the International Coffee Organization’s composite index soared by 30.3 % year-on-year in October, its sharpest jump in more than a decade. While the month-to-month gain was modest, the annual spike is reshaping supply contracts, retail strategies and consumer habits from Lisbon to Porto.

Surge Takes Retailers by Surprise

A single pound of green beans traded in New York at an average 326.38 US cents, almost double the level seen when the pandemic first dented demand. Traders point to a cocktail of tight inventories, higher futures market premiums and speculative positions that magnified every headline. In practical terms, importers who had hoped for a post-harvest dip now face invoices that include a 90 % mark-up compared with late-2023. Several Portuguese roasters quietly admit that their cost base has risen so steeply that absorbing it is no longer an option.

Weather Turns Against the Bean

The climate narrative is no longer confined to seasonal chatter. Severe drought in Brazil, punctuated by unexpected frosts and scattered hail, curtailed Arabica flowering and trimmed yields. A late-season typhoon in Viet Nam disrupted Robusta harvests that were on course for a four-year high. Central American plantations, still reeling from Hurricane Melissa, struggled to regain traction. The result is the smallest certified stock of coffee on the main exchanges in twenty-five years, a statistic that traders cite every time a new contract clears at a record price.

Supply Chain Knots

Weather is only half the story. The global freight system is also working against stability. A shortage of containers, congestion in Brazilian ports and intermittent restrictions through the Suez Canal have inflated shipping costs, stretching delivery times by as much as three weeks. Portuguese importers complain that they pay not only for the higher bean price but also for added war-risk insurance premiums, extra demurrage fees and, on occasion, emergency air-freight surcharges when café chains run critically low.

Producers See Windfall, Yet Caution Remains

Farmers who managed to harvest a normal crop are benefitting from the rally. Cooperatives in Minas Gerais tell reporters that a tonne of Arabica now finances deferred maintenance, new drying patios and even solar panels. Still, rising expenses for fertiliser, energy and labor threaten to erode part of the margin. In Africa and Asia, authorities voice concern that higher prices could accelerate land conversion, endangering forest conservation goals unless robust safeguard programs accompany the windfall.

What It Means For the Portuguese Cup

Industry surveys suggest the average price of a “bica” could climb to €0.95 in early 2026, up from roughly €0.65 three years ago. Restaurant associations warn that the standard after-lunch espresso might soon command €1.50 in high-rent districts of Lisbon. Household shoppers are already paying more: supermarket data from October show a 24 % jump in ground-coffee labels over twelve months. Analysts caution that, unlike previous cycles, the strength of the dollar against the euro amplifies the squeeze because beans are invoiced in US currency.

How Brands Are Responding

Global players are tweaking strategy. Nestlé is pouring R$1 billion into its soluble-coffee plant in Araras, aiming for efficiency gains that offset dearer beans. Starbucks has pushed through selective menu increases in North America and signals that similar moves could reach Europe if costs stay elevated. Mid-sized Portuguese roasters contemplate blending a higher share of Robusta to keep retail packs affordable, even though taste panels note a slight shift in cup profile. Many chains, mindful of consumer sensitivity to price hikes, are instead experimenting with smaller serving sizes, loyalty-app discounts and seasonal limited editions to maintain volume.

Looking Ahead

Market forecasters once expected a steep correction by late 2025, yet the latest data from the USDA and ICO sketch a different landscape: global production is projected at 178.7 M bags, consumption at 169.4 M, leaving stocks thin. Unless Brazilian rainfall patterns normalise and Vietnamese plantations escape further storm damage, the supply cushion may remain scant. For Portugal, where coffee culture is entwined with daily life, the coming quarters will test whether consumers accept higher price points or scale back their cherished ritual. Either way, the barista’s question— “com açúcar?”— now carries a pricier subtext.