Pricing Arabica Coffee Beans: A Consumer’s Guide to the Coffee C Market

By Aliisa Oake

Behind the scenes of understanding coffee, the price of arabica coffee beans, specifically green, un-roasted coffee, can be complicated. But why? How exactly is the price of coffee determined? In this article, we’ll discuss the coffee C market and uncover some of the factors that drive the prices of Arabica coffee beans to rise and fall.

When you step into your favorite coffee shop, the price of your daily cup feels consistent every day, which is why this area is sometimes overlooked by average coffee consumers. For coffee producers, buyers, and consumers, understanding coffee and the coffee C market can offer insight on how global events can shape the price of your morning coffee and why they may vary. By furthering your understanding of the coffee C market, you will be able to have a better idea of the importance of establishing fair and sustainable pricing for coffee producers, enhancing your purchasing habits by purchasing with a purpose. 

Coffee Producer - Pamela - from Santa Anita Cooperative

The Coffee C Market

Coffee may seem like a simple, everyday commodity, but its post-harvest journey involves a lengthier financial process, much like a stock market. Instead of a traditional stock exchange, coffee trading takes place on the coffee C market – the global marketplace where green Arabica beans and coffee futures contracts are bought and sold. The trade is operated by the Intercontinental Exchange (ICE), which acts as a central third-party, or “counter-party” for buyers and sellers worldwide. 

The role of the coffee C market is to standardize and structure coffee trading, setting rules for transactions, one of them being with futures contracts. These contracts are agreements between buyers and sellers to set a price for coffee to be delivered at a future date. The future prices of coffee are mainly determined based on the availability of the product and its outside factors. They shift frequently, being driven by factors like weather patterns, global supply and demand, and broader economic trends. The prices set in the C market don’t directly determine how much you pay for your coffee at a coffee shop, but act as a global benchmark to guide roasters how to set their prices for their products. 

Parchment coffee on drying patio

When purchasing un-roasted, specialty coffee there are specific quality standards that must be met for coffee to be eligible for trading on the coffee C market. To begin with, C market coffee must be Arabica, un-roasted, and sourced from one of the twenty recognized coffee producing countries. The green beans are then traded in one of the eight designated green coffee warehouses located around the world. These trades typically occur in large quantities of about 37,500 pounds at a time, which is about the size of a standard shipping container. 

With Arabica and Robusta coffee being of different qualities, they are traded in different exchanges. Arabica coffee is typically traded on the New York Intercontinental Exchange (ICE), where Robusta coffee is traded on the London International Financial Futures Exchange (LIFFE). These separate exchanges contribute to pricing dynamics between market behavior for each type of coffee. Since Robusta coffee is typically considered a lower-quality, cheaper coffee, due to its more resilient nature in harsh growing conditions, it is less expensive. Arabica coffee is more sensitive to environmental conditions and requires more care in the cultivation process, so the price is typically considered premium because of its higher flavor profile and lower production yield.

Factors that Influence the Coffee C Market

The C market is highly volatile and subject to a wide range of factors that can cause prices to swing dramatically, sometimes within hours. These fluctuations are largely driven by supply and demand dynamics between producers and consumers. Demand is a powerful factor in shaping the global coffee market and the price of green coffee. External factors such as economic shifts, weather conditions, or changing consumer preferences can cause fluctuations in demand, which directly influences prices and market dynamics. 

The C market coffee price sits at a point where supply equals demand. When demand for coffee is high but supply is limited, the price will rise until it reaches a level where consumers stop buying because the cost becomes too steep. On the other hand, if there’s an oversupply of coffee, prices drop to make it more appealing to buyers. As the price drops, demand picks up again, until it reaches a point where buyers and sellers agree on a price, and the market stabilizes. 

Ijat’z Cooperative Members - Arnulfo Cuj (right) and Roberto Cojtín (left)

A majority of the volatility comes from the unpredictable factors that affect supply levels. Weather conditions, production forecasts, and logistical issues of distribution and shipping can all dramatically affect the amount of coffee available for trade. Arabica coffee crops are heavily reliant on growing conditions and seasonality, so weather conditions like droughts, excessive rainfall, or extreme temperatures can significantly affect the amount of coffee being harvested and the quality. In addition, the effects of climate change are making these unpredictable shifts even more frequent, threatening the livelihoods of coffee crops. 

Producers often make forecasts on their coffee yield based on current conditions, but when uncertainty lies ahead – whether from a bad season or an unclear production forecast – it sends negative signals through the marketplace. This uncertainty sparks price volatility, making the coffee C market even more unpredictable. 

Political instability in coffee-producing countries can create a chain reaction on the global coffee C market. When political unrest or conflict disrupts production, especially during export, supply shortages can occur, which increases prices. Broader economic conditions such as inflation, recession, or changes in consumer purchasing power can also impact demand for coffee. For instance, a global economic slowdown could lead to reduced coffee consumption, lowering demand and C market prices. In addition, fluctuations in currency values can have a significant impact on pricing. With coffee being traded globally, exchange rates, like a stronger U.S. dollar, can make coffee more expensive for buyers in other parts of the world.  

Recent Changes in the Global Coffee C Market Impact Coffee Producers

The global coffee market has experienced some significant changes over the past year. As witnessed by many coffee producers around the world, climate change has been affecting production levels, leading to a decrease in output levels. Brazil is the world’s largest coffee producer, so most of what happens in the coffee C market is based on the country’s specific coffee market.

Coffee sacks by Cultura Spirit

In 2024, there has been a drought in Brazil and a few other coffee producing countries, which has caused more problems. With a lack of rain and unpredictable rainfall patterns seen in Guatemala, this has hurt coffee production, particularly Arabica coffee beans, which are more sensitive to temperature fluctuations. When analyzing this and its effects on the coffee C market, with a decrease in supply by producers, there has been an increase in demand by consumers. The outcome of this – Arabica coffee beans for the 2024/2025 harvest have reached a price of about $4 per pound, which is constantly fluctuating. This price point has increased by 70% over the past year and is the highest it has ever been in 47 years. Although this may seem like it could positively impact producers, a high coffee C market price doesn’t allow producers to obtain a higher profit. 

When the C market coffee price drops, producers earn less, which drastically affects not only coffee operations, but the lives of coffee communities. Producers struggle with covering costs involved with labor, equipment, and land maintenance, but also still need to factor in providing for their families. During low-price periods, they may receive as little as $1.00 or $1.50 per pound of coffee, far below what it costs to produce.

On the other hand, when prices rise, producers can sell their harvest for more, which motivates them to invest into their farms more or increase productivity. Sometimes they may act too quickly and spend too much on investments and developments, leaving them in desperate measures when coffee C market prices drop once again. With this, many producers who are part of cooperatives are able to negotiate for better contracts with buyers and share their profits with their members, improving the collective well-being of their communities. 

Rising C market coffee prices come with another set of problems. If coffee prices become too high, global demand may decrease since consumers could see coffee as being too expensive. This leaves producers with too much unsold green coffee beans, creating a “glut”, or a situation where there is an excessive supply that exceeds the demand, leading to a drop in price. Over time, if prices continue to increase, larger commercial farms or corporations might take over and establish a larger presence in the coffee market, pushing out small scale producers or forcing them to operate on smaller levels. 

The Future of the Coffee C Market

Price volatility in the coffee C market creates an unstable environment for small-scale producers. While high prices can offer temporary financial aid, they are often followed by price drops that leave producers struggling to cover costs. Coffee producers face uncontrollable and constant highs and lows in their industry, making it incredibly difficult to obtain a steady income, almost impossible to plan for the future. This cycle of instability has consequences for the livelihoods of coffee producers along with the entire global coffee supply chain. 

As discussed throughout this blog, the coffee C market largely impacts global economies and the livelihoods for millions of coffee producers around the world. As challenges persist, the stability of income levels provided by the coffee C market are threatened, along with the well-being of those who cultivate it. As consumer preferences evolve and sustainability becomes prioritized, it’s essential for the coffee C market to adapt to promote fair trade, environmental conservation, and long-term economic viability for those who are involved. 

A key development that has been made to adapt with this issue is enhancing relationship-based trade, emphasizing direct, long-term partnerships between producers and buyers – something that De La Gente strives for in their supply chain model.

Read more about De La Gente’s approach to their pricing strategy and the coffee C market in our upcoming blog post!