Coffee is not technically a necessity, but for billions of people around the world, it is essential: with breakfast, to perk up at work and at social gatherings. When global wholesale coffee prices spiked after a drought followed by a hard frost in Brazil in mid-2021, there was widespread alarm.
Not only would Swedes’ beloved fika be costlier, small coffee shops struggle to get their beans and the price of a bag of coffee rise at the store, experts warned that shocks like this would keep coming year after year. From May–November 2021 alone, the International Coffee Organization’s composite indicator price rose by 45% as the group described “record-high volatility” in the market.
Climate change is taking a toll on coffee production not just in Brazil, but globally. Ensuring a steady supply will require more than what individual farmers or even countries can accomplish alone. Without international cooperation, coffee producers and buyers may adapt in ways that help them in the near term, but harm others and the global supply chain over time.
A climate-sensitive crop
Native to Ethiopia and named after Kaffa, the region where it was discovered, coffee is now grown in tropical and subtropical areas with a very specific set of temperature and rain conditions. The higher-value Arabica species (Coffea arabica), which makes up 60–70% of global production, has an optimal temperature range of 18–21°C and can tolerate mean annual temperatures up to about 24°C. In warmer conditions, the fruit ripens too fast: continuous exposure to heat above 30°C can badly damage the plants.
Robusta coffee (Coffea canephora var. Robusta), which is more bitter and less valuable on global markets and is most heavily consumed in developing countries, can tolerate greater heat, but is more sensitive to cold. Both types of coffee also require ample amounts of water.
With climate change, large swaths of coffee-growing land are expected to become unsuitable, especially for Arabica. In Brazil’s Minas Gerais and São Paulo States, where the largest share of the country’s coffee production occurs, the share of land suited for coffee could decline from 70–75% to 20–25%. In Goiás, growing coffee may no longer be viable.
Warming temperatures and changes in rainfall could sharply reduce the coffee-growing areas of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Mexico as well. Vietnam‘s prime coffee production areas may no longer be viable and the Congo basin and coastal regions of West Africa will also have less suitable land. Coffee production could continue in many countries by moving into higher elevations, but that will not help the owners of existing farms and it could require converting forests.
A recent SEI analysis found that climate change could reduce global Arabica coffee production by 45.2% and global Robusta production by 23.5%.
For the coffee industry, which is dominated by major companies in the Global North, and retailers and consumers in wealthy countries, climate change poses an enormous and potentially costly adaptation challenge. However, the stakes are even higher for the roughly 125 million people whose livelihoods depend on coffee production, especially the 25 million smallholders who produce 80% of the crop.
Brazil and its global buyers and competitors
Coffee-exporting countries produced 175.3 million 60 kg bags of coffee (10.5 billion metric tons) in 2020, with Brazil alone producing 69 million, or 39%, mainly Arabica. Brazil is also a major consumer of coffee, but exported enough in 2019 to capture about 26% of the $17.9 billion export market.
The SEI analysis found that with climate change, Brazil, El Salvador, Honduras and Nicaragua would be by far the most heavily affected among the top 10 Arabica exporters. In the Robusta market, projected crop reductions are more evenly distributed among the top producers, but Cameroon, Côte D’Ivoire and Uganda are expected to be particularly hard-hit, while Brazil’s losses will be less severe.
The crop losses this year in Brazil offer a preview of how climate change may affect future markets. The drought and frost combined damaged about 1.5 million km2 of cropland and may have ruined almost 600 million kg of coffee beans. In October 2021, the first month of the affected harvest year, Brazil’s coffee exports were down by 23.8%. However, other exporters made up much of the difference, so overall exports were down by only 4.4% (8.8% for Arabica beans, while Robusta exports increased).
Top coffee buyers such as Starbucks and Nestlé had secured their supplies months ahead and rushed to close new contracts with producers outside Brazil. Smaller buyers struggled more and paid higher prices, but also found alternative sellers in Asia, Africa, and Central and South America.
In the near-term, Brazil’s woes will benefit producers in other countries, helping them access new contracts at a time when prices are particularly high. However, the global coffee market remains highly consolidated: Vietnam, the second-largest exporter, produced less than half of Brazil’s volume in 2020, about 16.5% of total production, and Colombia, the third, just 8.2%. Indonesia came in fourth at 6.9% and Ethiopia, the birthplace of coffee, was fifth at 4.2%. Most producers, even well-known ones such as Costa Rica and Kenya, have only tiny fractions of the export market.
Brazil is also adapting to changing climatic conditions by shifting more of its production to Robusta, which it historically grew mainly for domestic consumption. Though Vietnam still dominates the market, exporting nearly five times as much Robusta as Brazil, the latter has been working to improve its local Robusta varieties and planting more.
“It is much more robust and productive than Arabica,” a Brazilian scientist told Reuters, while a Brazilian coffee trader was quoted predicting, “The world will in the near future use a lot of Brazilian Robusta, I’m sure of that.”
Adaptation on a global scale
As climate change intensifies, even a shift from Arabica to Robusta may not be enough for Brazil, as Robusta crops have also been lost to extreme weather, and other hazards, such as increased pests and diseases in warmer conditions, pose significant threats as well.
From a global perspective, ensuring a steady supply of coffee to meet growing demand and protecting the livelihoods of coffee farmers is a challenge best solved through cooperation. Actors in the Global North have key roles to play, both as development partners and out of self-interest. The EU alone consumed 24% of the world’s coffee in 2020–21 and the US 16%.
Though the SEI analysis found that smaller countries are most exposed to climate change impacts on major coffee exports, Scandinavians and other Europeans, the world’s top coffee drinkers per capita, will have tastier and more affordable coffee if they can help producers to adapt. The same is true of major coffee-buying corporations even if their market power enables them to better withstand crises. Third-party actors that are already working to make coffee markets more just, such as Fairtrade, are particularly well positioned to support farmers.
A vision for “just resilience”
New and more resilient coffee varieties need to be developed, including through hybridization with wild coffee varieties in Africa and elsewhere that are themselves in danger from climate change, and need to be protected. After years of shifting to full-sun production to maximize yields and reduce costs, farmers will need to return to more shade production and agroforestry. That in turn may create new pest and disease control challenges, requiring further innovation.
Coffee trees are perennials and the average lifespan of a coffee plantation is about 30 years, so planting new varieties, often at higher elevations than where coffee is now grown, will be a major endeavour in itself. Avoiding deforestation as farmers seek higher land will also be a challenge.
By working together with support from importing countries coffee-producing countries may be able to scale up experimental approaches more quickly and share knowledge about evolving adaptation strategies, especially as they face many shared challenges. They can also collaborate on insurance schemes to protect farmers from unavoidable calamities such as the recent frost in Brazil.
Collaboration is not yet the norm in the global coffee market. However, in a fast-changing climate, the future of fika, espresso, buna and cafecito depends on looking beyond near-term self-interest to tackle a shared challenge collectively.