ARABICA PRICES ARE SURGING: WHO’S WINNING & WHO’S STRUGLING ?
The C-market for Arabica is climbing fast, creating winners and losers in the coffee supply chain. While some producers are making big gains, others—including exporters, middlemen, and buyers—are feeling the financial pressure. Let’s try to break it down pragmatically with some examples:
Who’s Winning?
Farmers & exporters with stock on hand (Ethiopia, Colombia, Brazil)
– Those who didn’t pre-sell their coffee at lower prices are now getting premium rates, maximizing profits.
Ethiopian specialty coffee producers
– Many sell via direct trade or flexible contracts, meaning they can take full advantage of the price surge.
– The devaluation of the Ethiopian birr makes exports even more competitive.
Unhedged small & medium farmers in Brazil & Colombia
– Farmers who didn’t commit to long-term contracts early in the season are now selling at higher prices.
– Cooperatives with flexible pricing models are also seeing strong gains.
Indonesian Arabica farmers (Sumatra, Java)
– Higher Arabica prices mean better earnings, especially for smallholders selling to specialty markets.
Middlemen in some regions (if they control unsold stock)
– Local traders and intermediaries who bought coffee earlier at lower prices can now sell at a higher margin.
Who’s Struggling?
Brazilian & Colombian + others producers who pre-sold at lower prices
– Many large producers hedged their crops early to secure revenue—but now they are locked into lower prices and missing out on today’s rally.
– Some exporters now face financial losses because they have to buy coffee at higher prices to fulfill contracts.
Exporters & traders caught in short hedging positions
– Those who bet on falling prices (short positions) are now facing margin calls—they must add capital to their accounts or close positions at a loss.
Roasters & buyers who didn’t hedge in time
– Roasters and importers without forward contracts now face higher procurement costs, squeezing their margins.
– Many are now forced to raise prices or look for alternatives.
– Middlemen in some regions (if they operate on fixed-price contracts)
– In countries where middlemen buy at fixed prices and cannot adjust selling prices, they risk losing money.
Indonesian exporters with pre-sold contracts
– Exporters who locked in lower prices earlier must now pay more for coffee, putting pressure on their bottom line.
To conclude
This Arabica rally is a blessing for those with flexibility but a nightmare for those locked into contracts, facing margin calls, or caught in pricing agreements.
If you want to comment and explain in more details about winners and loosers in actual c-market, please feel free to comment and share them to the coffee community.
Smart hedging strategies and cash flow management are more critical than ever.