Global coffee prices have plummeted, with Arabica down 17% and Robusta falling 30% in recent months, as stronger harvest forecasts and weakening demand weigh on the market, according to RaboResearch.
A 0.5% drop in global consumption is expected in 2025, contributing to a 1.4 million bag surplus for the 2025/26 season—mostly Arabica.
NZ Coffee Prices Lag Behind Global Trends
Falling coffee prices worldwide may not bring quick relief to New Zealand’s café-goers. While the global market is softening, Brad Olsen of Infometrics warns that domestic consumers remain insulated from those shifts—for now.
“Given the full increase in global coffee prices hasn’t fully hit Kiwis’ morning caffeine hit yet there might not be real relief for New Zealand coffee prices,” Olsen said.
Arabica, down 3.1% since February, is still more than twice the price it was in May 2019. Robusta has declined 9.8% from its peak, yet also remains significantly elevated compared to pre-COVID levels.
Rising Instant Coffee Prices Causing Delayed Impact
The cost of instant coffee in New Zealand continues to climb, with May 2025 prices up 14% year-on-year and 36% above 2019 levels, according to Stats NZ.
Infometrics chief executive Brad Olsen says the domestic market has only absorbed a fraction of the global price shock.
“Less than a tenth of global coffee price pressure has hit directly,” he said. “With not as much of the original hit from coffee prices hitting local prices, we might not see a lot of relief. If anything, forward ordering of coffee means we might still see further price increases trickle through as beans are imported after being ordered before recent price falls.”
Café Operators Continue Absorbing Rising Costs
While retail prices rise, takeaway coffee prices in New Zealand have remained relatively stable—up just 3.8% year-on-year in May. Olsen credits this restraint to café owners trying to shield customers from rising input costs.
“Café operators have clearly been trying to absorb as much of coffee price rises as they can to limit how many people might stop buying at higher prices,” he said.
Café Pricing Strategies Face Sustainability Limits
New Zealand’s café sector may be nearing the point where shielding customers from cost increases is no longer an option.
Flight Coffee and The Hangar’s Richard Corney describes retail coffee prices as “unsustainably low,” warning of risks to small business viability without adjustment.
“If prices had kept up with the increase in café costs in recent years, a flat white would be selling for $7,” Corney said.
Long-term pricing changes may be on the horizon for the industry, with high input costs and thinning margins.