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Coffee prices caught between record harvests and Hormuz disruption
Global coffee prices have fallen sharply from the record highs above US$4.40/lb reached in early 2025, as Brazil’s national supply agency forecasts a record 66.2 million bag harvest and Rabobank projects the first significant global production surplus in five years. But the correction is now facing fresh complications with the closure of the Strait of Hormuz amid the Iran war, which is pushing freight rates, insurance premiums, and fuel costs higher just as the supply picture improves.The world’s two largest coffee buyers have laid bare how severe the input cost pressure has been. JDE Peet’s, the biggest pure-play coffee company, absorbed €1.6 billion (US$1.73 billion) in cost inflation in 2025 and passed on 19.5% in pricing to consumers, while Nestlé reported that coffee and cocoa commodity costs drove its underlying trading operating profit margin down 130 basis points.Amber McKinzie, Cargill’s marketing manager for sugar reduction, highlights the sustainability and cost benefits of fermentation-derived sweeteners like EverSweet, the company’s stevia-based ingredient. With Cargill making significant investments in fermentation, McKinzie explains how the method reduces land and water use and mitigates supply chain risks, as it can be implemented anywhere globally.
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