Analysis-Is coffee the new cocoa? Some expect coffee prices to also crash

By Marcelo Teixeira

TAMPA, Florida, March 18 (Reuters) – Some coffee industry experts have been drawing comparisons between the coffee and cocoa markets, projecting that coffee prices will sink in coming months, just as cocoa prices crashed after the chocolate-making ingredient hit an all-time high in 2024.

Whether coffee will replicate cocoa’s downward price curve was a focus of discussions at last week’s annual convention of the National Coffee Association in Tampa, Florida.

“I would be shocked if it did not happen,” said Carley Garner, senior commodities strategist at DeCarley Trading, a division of Zaner. “I do think coffee is the new cocoa,” she said.

Cocoa prices in New York hit a record high in December 2024 at over $12,000 per ton as poor weather in producing countries squeezed supplies. But just over a year later, cocoa plummeted more than 70% as consumers cut back on high-end chocolate and chocolate makers reduced packaging size, or reformulated candy bars with cheaper alternatives to cocoa.

Like cocoa, arabica coffee also rose as negative weather in the tropics hampered production. It hit a record high in February 2025 and stayed pricey as U.S. President Donald Trump’s tariffs distorted coffee trade. The expectation of a sharp recovery in production in top grower Brazil, however, led prices downward this year.

“I think coffee prices will be at $2 (per pound) by the end of the year,” Garner said. She thinks high prices are hurting demand.

Avere Commodities’ coffee analyst Digby Beatson-Hird believes New York coffee will drop even further, to $1.80 per pound this year. The market closed at nearly $2.93 per pound on Tuesday.

CUTTING COSTS

An NCA poll of 1,500 people in the U.S. in January found that 61% of respondents took actions to cut spending on coffee. Some reduced visits to coffee shops and drank more at home, while others switched to cheaper brands. The number of coffee drinkers, however, did not fall, NCA said.

The industry also responded, said David Behrends, managing partner and head of trading at Sucafina SA, one of the world’s largest coffee merchants.

More expensive mild arabicas, such as Colombian and Central American coffees, have lost market share, he said, while cheaper robusta beans gained.

Coffee demand stalled in 2025, said Carlos Mera, chief coffee analyst for Dutch bank Rabobank, which saw no growth last year compared to a historical demand increase of 2.3% per year before the pandemic.

Mera said coffee’s recent price fall will eventually reach consumers and boost demand again. He expects a 2% increase in 2026.

Demand numbers show a sharp difference between coffee and cocoa, and might explain why some doubt coffee prices will decline like cocoa did.

An expected record Brazil coffee crop may not bring much price relief to the market, analysts said.

Farmers are well capitalized and will sell gradually, likely keeping some volumes to replenish their stocks, said Cleber Castro, a sales representative for dozens of farms in Brazil.

(Reporting by Marcelo Teixeira. Editing by Emily Schmall and David Gregorio)