FAO warns of global coffee, cocoa and tea price volatility

The United Nations Food and Agriculture Organization (FAO) released a report highlighting growing instability in the worldwide markets for coffee, cocoa and tea. Price spikes over the past few years have been driven by climate‑related shocks such as droughts, frosts and excessive rainfall, and by the extreme concentration of production in a few countries – Brazil and Vietnam supply almost half of global coffee, Ivory Coast and Ghana account for more than two‑thirds of cocoa, and China produces over half of the world’s tea.

The report notes that more than 90 % of short‑term price moves are linked to sudden supply‑demand changes, while speculative activity by investment funds has amplified recent volatility, especially in coffee futures, without altering the underlying fundamentals of supply and demand.

Separately, the International Coffee Organization (ICO) reported that world coffee prices fell 2.8 % in June, reaching the lowest level in almost two years, but markets remain alert to the potential impact of a projected “super” El Niño event later this decade. Analysts say the price decline reflects easing inventory pressures, yet weather‑related risks continue to dominate market sentiment. Together, these developments underscore the vulnerability of smallholder farmers, who capture only a small share of the final retail value, and the need for coordinated policy actions to improve market transparency, invest in resilient agriculture and promote more equitable value distribution across the supply chain.