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Global Arabica coffee prices have surged more than 50% since August 2025, hitting their highest levels in years. The spike is being driven by trade tensions among the United States, Brazil, and Colombia—two of the world’s largest Arabica producers.

According to Nasdaq, prices soared after U.S. President Donald Trump announced plans to impose new import tariffs on Colombian coffee, while the strengthening of Brazil’s real slowed down exports. Arabica prices have now broken past USD 4.30 per pound, as stockpiles on the ICE exchange dropped to their lowest point in 19 months—just 467,000 bags.

The situation worsened after the U.S. implemented a 50% import tariff on Brazilian coffee, prompting American buyers to cancel new contracts and pushing global prices even higher.

Extreme weather has further tightened supply. Somar Meteorologia reported excessive rainfall in Minas Gerais, Brazil, while NOAA projected a 71% chance of La Niña, which could reduce next season’s coffee yields.

According to USDA FAS, global Arabica production for 2025/2026 is expected to fall 1.7% to 97 million bags, with a supply deficit of 8.5 million bags—the largest in the past five years.

In contrast, Indonesia’s coffee production is set to increase by 5% to 11.3 million bags, supported by favorable weather. Although 85% of Indonesia’s output is Robusta, the global Arabica rally has benefited farmers in Gayo, Toraja, and Kintamani, where local Arabica prices have jumped to Rp222,000 per kilogram.

This surge has also boosted Indonesia’s coffee exports by 6.5 million bags, mainly to European and Asian markets. While domestic consumption remains sluggish, the Arabica price boom offers Indonesia a golden opportunity to strengthen its position in the global premium coffee market.