Coffee Price Volatility: The Hidden Role of Currency Fluctuations

Coffee prices are influenced by currency fluctuations, but the impact is not always direct. The C market, geopolitics, weather, freight, and interest rates are the main drivers of coffee prices, according to Emily McIntyre, CEO of Swift Coffee Sourcing.

However, currency swings can affect behavior on the ground, particularly in countries where local currencies are weak against the US dollar. For example, Ethiopia's repeated birr devaluations have led to hoarding, side-selling, and renegotiated contracts that ripple through pricing.

In Colombia, the peso's strengthening has limited exporters' ability to outbid domestic buyers, despite a 33% drop in local prices. Meanwhile, Brazilian producers are discouraged from selling due to the real rally.