Coffee Price Surge Forces Some Shops to Raise Prices

If you’ve noticed your usual cup of coffee tasting a bit more expensive lately, you’re not imagining things. Global coffee prices have surged, driven by a severe drought and high temperatures in Brazil—the world’s largest coffee producer—leading to a significant drop in bean supply. That shortage is now rippling through international markets and starting to hit local coffee shops.

As of June 9, Arabica coffee futures on the Intercontinental Exchange (ICE) had risen nearly 70% year-to-date. Some domestic coffee retailers are preparing to raise prices by as much as 20%, while others are testing gentler approaches like raising refill costs or launching new drinks to offset rising expenses without shocking customers.

Why Are Coffee Prices Going Up?

The primary driver is Brazil’s extreme weather in 2024. The country experienced both severe drought and intense heat, which drastically reduced its coffee bean harvest. Since Brazil supplies around 40% of the world’s coffee, this shortfall has had a major impact on global supply chains. The reduced output has driven up international green coffee bean prices, which then affects everyone from large roasters to independent cafés.

What’s Happening in the Domestic Market?

In China, the effects are becoming visible. Industry sources report that the purchase price of Yunnan coffee beans has jumped from around 14 RMB per kilogram at the end of last year to approximately 25 RMB per kilogram—nearly an 80% increase. Meanwhile, the wholesale price of coffee beans has risen roughly 25% overall. For context, beans bought at 14 RMB/kg can end up with a wholesale price of around 40 RMB/kg after processing, meaning the 25% wholesale hike adds roughly 10 RMB in cost per kilo.

Some coffee chains are already acting. Chongqing-based training schools, such as Barista Training Base, have been informed of a 20% price hike on coffee and tea products from July, due to rising costs across rent, labor, and now raw materials. Other chains may follow. A café owner in Chongqing with four locations plans to adjust prices in late June or early July, but will do so selectively—such as through new drinks or adjusted refills—rather than a blanket increase.

Major international brands like Starbucks, McDonald’s McCafé, and Pacific Coffee (owned by China Resources) have not announced price changes yet, but industry insiders suggest that price hikes later in the year remain likely.

How Are Independent Cafés Responding?

Independent coffee shops, which make up over 60% of the estimated 500 cafés in Chongqing, face a tougher dilemma. Many have small, loyal customer bases and intense local competition, making them hesitant to raise prices. One café owner noted that increasing prices might drive away regulars, but not doing so could hurt already thin profit margins. Most are waiting to see how the market evolves.

Even before these increases, coffee prices had been climbing in urban areas. A basic cup often costs 20 RMB or more, with many cafés charging 30–40 RMB. For customers used to meeting friends over coffee and snacks, a few drinks and desserts can easily add up to 200 RMB—comparable to a casual restaurant meal.

Is a Price Hike Really the Answer?

Some industry veterans caution against immediate price increases. They argue that coffee is still a developing market in China, and consumers aren’t always aware of bean quality or origin. Many cafés could absorb short-term cost pressures by improving efficiency or adjusting their offerings rather than raising prices. Weather-driven cost spikes, they note, are usually temporary.

Coffee prices, like other agricultural commodities, tend to fluctuate in cycles. Experts point out that significant price shifts typically occur every 2–3 years due to factors like demand shifts and climate events. For café owners, understanding these cycles and building pricing strategies that account for ingredient volatility is key to long-term stability.

Operators also face significant fixed costs, especially rent and staff salaries, which often outweigh the impact of bean price swings. Some café owners are considering expanding their menus with non-coffee drinks, desserts, or food pairings to maintain revenue without raising coffee prices directly.

Frequently Asked Questions

How much have global coffee bean prices increased in 2024?

As of June 9, Arabica coffee futures on ICE have risen nearly 70% year-to-date due to Brazil’s drought and reduced harvest.

Are Chinese coffee shops raising their prices?

Yes, some are. For example, a Chongqing training school announced a 20% price hike on coffee and tea products starting in July. Other cafés may raise prices selectively or launch new drinks instead of increasing existing ones.

How much did Yunnan coffee bean prices rise?

Yunnan coffee bean purchase prices increased from around 14 RMB per kilogram at the end of 2023 to about 25 RMB per kilogram in 2024—a jump of nearly 80%.

What’s the average wholesale price increase for coffee beans?

The wholesale price of coffee beans has risen approximately 25% overall. For beans originally bought at 14 RMB/kg, the post-processing wholesale price is around 40 RMB/kg, adding about 10 RMB per kg in cost.

Will big coffee chains like Starbucks raise prices soon?

As of now, Starbucks, McCafé, and Pacific Coffee have not announced price hikes, but industry insiders believe it is likely later in the year due to ongoing cost pressures.

How are small coffee shops dealing with higher costs?

Many are hesitant to raise prices due to competition and customer loyalty. Some are considering launching new drinks, adjusting refill prices, or adding non-coffee items to maintain revenue without directly increasing coffee prices.

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