Published 2 February 2026. Updated 29 August 2026 with current market data, the revised tariff position and the confirmed EUDR timeline.
Update, August 2026: the market fell, and then it didn't
When we published this in February, the C Market was sitting around $3.55 a pound and Roland said he'd be surprised to see it drop below $3. It dropped below $3 within three weeks.
By late February arabica was trading near $2.80, more than 30% down from its November 2025 peak of just over $4.20. It kept sliding into the spring, bottoming around $2.44. Then it climbed back through the summer. On 21 August it closed at $3.24, before falling again at the end of the month as Brazil's harvest progressed faster than expected.
So: Roland called the direction wrong on the short term and right on the medium term. The market did drop below $3, and it didn't stay there. His broader argument, that the structural floor has moved and the days of 80 cent coffee are gone, still looks sound. We'd rather say that plainly than quietly delete the prediction.
What's driving it now
Brazil is bringing in a record crop. Forecasts for the 2026/27 harvest cluster around 75 million bags, a jump of roughly 17% on last year, though Conab's own number is more conservative at 66.2 million. A Reuters poll in late August put arabica at around $3 a pound by year end, with the global market swinging from a 1.7 million bag surplus in 2025/26 to 8.2 million bags in 2026/27.
Pushing the other way: ICE certified arabica stocks have fallen to 226,242 bags, close to the lowest level since 1999. Low stocks and a big crop are unusual bedfellows, which is part of why the market has been so jumpy.
The tariff position has changed twice
The 50% US tariff on Brazilian goods that Roland describes below was largely unwound in November 2025, when green coffee was removed from the list retroactively. Arabica futures fell about 5% on the news. A new 25% Section 301 duty on Brazilian imports followed in July 2026, with coffee reported among the carve-outs, and Brazilian instant coffee got its own exemption on 16 July. None of this touches what we pay directly, since we import to the UK, but it moves the C Market and the C Market moves us.
The EUDR now has a firm date
In February this was an open question. It isn't any more. Regulation (EU) 2025/2650 pushed the deforestation rules back to 30 December 2026 for large and medium operators, and 30 June 2027 for micro and small ones. In May 2026 the Commission published its simplification review and confirmed it won't reopen the text. That date is now four months away, and the compliance work it creates is one more cost sitting in the supply chain.
Why our prices haven't come down with the market
This is the question we've been getting most, and it's a fair one. Under the differential system Roland explains below, you lock your price before export, not after. The Brazilian coffees we're pouring now were locked in during late 2025, when the baseline was above $4. A market at $3.24 today doesn't retroactively change what we paid for coffee already in the warehouse. It will feed through, but it feeds through on the next buying cycle rather than this one.
Originally published 2 February 2026
As we gear up to release our new Brazilian coffees from February onwards, we wanted to give you a heads-up on what's shaping pricing this year. Spoiler: it's a lot.
The global C Market price for arabica has hit historic highs. It's a perfect storm: a drought-hammered 2024 harvest, geopolitical uncertainty in the shape of US tariffs on Brazilian coffee, looming EU regulations, and day-to-day market swings that have been, frankly, wild. Because Brazilian coffees are priced using a differential model tied directly to the C Market rather than fixed sustainable prices, that volatility hits the final cost of green coffee hard. And that's before quality premiums enter the conversation.
Those higher baseline prices are amplifying financial pressure right through the supply chain, well beyond what we pay for the coffee itself. Importers and exporters need to borrow more capital to finance coffee at these levels, and with global interest rates still high, financing costs have jumped substantially. Those costs flow through to roasters, and then to the businesses we supply.
There's an upside. Brazilian producers are seeing record earnings, and many are reinvesting in worker housing, community projects and sustainability work. That's a good thing. But sourcing quality Brazilian coffee costs more across the board right now.
Most people in the trade think high C Market pricing is here to stay. Climate-driven weather instability, rising global demand and low global inventories all point toward a structurally higher baseline. That creates real challenges for margin management. It also marks a long-overdue shift toward better earnings for producers worldwide.
We sat down with our Green Buyer Roland Glew to get the full story. Here's what he had to say.
Understanding the C Market
Before we get to Brazil specifically, it's worth understanding how global coffee pricing works. The C Market, or New York Coffee Exchange, is where arabica is traded as a commodity, like oil or wheat. It creates a baseline price per pound that moves daily on supply, demand and speculation.
The important part: that price is only a baseline. For most of coffee's history it has sat below what it actually costs to produce quality coffee sustainably. That's why specialty roasters like us pay premiums on top, often substantial ones. We're paying for quality, for sustainability, and so producers can make a living.
When we talk about market prices in this article, we mean the C Market baseline. It isn't what we pay our producers. We always pay significantly more.
The Brazilian coffee market is a different beast
We pay producers differently depending on which country we're sourcing from. How does Brazil work, and why?
Roland: Brazil is unique in the coffee world, and it comes down to scale. Look at a farm like Limoncillo in Nicaragua. They're producing around 3,000 bags and using maybe 300 people to harvest it. Compare that to Nova Aliança in Brazil, producing 6,000 to 8,000 bags with fewer than 30 full-time workers.
That efficiency means the cost of production in Brazil is way lower than everywhere else. And because they're such a massive force in the market, producing about 40% of the world's coffee, they've historically driven that baseline C Market price down through sheer volume. For decades the C Market price has essentially been set by the lowest price Brazil's most efficient farms can accept.
So we buy Brazilian coffee on what's called a differential, a premium above or below the C Market price. For quality coffees like ours we're paying well above that baseline. It's different from how we structure pricing with most other origins, where we work out what's sustainable for the producer and lock that in year to year, essentially ignoring the C Market altogether.
That sounds risky. Why would producers want to operate that way?
Roland: It works for them because they have the financial resources to play the game strategically. If you're a smallholder in Guatemala and you need money now to pay workers or invest in next year's crop, you can't afford to gamble on C Market movements. You need price certainty, which is why we agree fixed prices with them regardless of what the C Market does.
Brazilian producers, particularly the larger operations we work with, have access to bank financing and enough capital that they can wait. They can watch the C Market, time when they lock in their price, and maximise their returns. If they have a tight year financially, they've got reserves from previous good years.
And even when the C Market was low historically, Brazilian producers working on a differential model with quality premiums were still making decent money, because their production costs are so much lower. We're always open to moving to different pricing structures if they prefer, but honestly, they're all really happy with the differential system.
When we buy on a differential, we make sure we're paying a substantial premium for the quality we want. That premium is added on top of whatever the C Market is doing, which is the key factor.
2025: when everything changed
So what's happened this year that's pushed prices so high?
Roland: [laughs] If I could answer that definitively, I'd be a very wealthy man. The truth is, nobody in the industry really understands exactly why the C Market has behaved the way it has this year. Not importers, not exporters, not the producers.
Some context: the C Market right now is hovering around $3.55 per pound. Five years ago it was significantly lower. But a few months back we hit $4.30 per pound, and those were historic highs. For perspective, the C Market spent most of the last 40 years between 80 cents and $1.50 per pound.
Remember, these are baseline commodity prices. We pay our quality premiums on top. But when the baseline jumps from $1.50 to $4.30, it dramatically affects what we end up paying, even with the same premium percentage.
That's an incredible jump. What's driving it?
Roland: A perfect storm of factors, all feeding into each other.
First, harvest expectations. We had a bad year in 2024, severe drought devastated harvests. So expectations for 2025 were high. When the harvest came in as reasonable but not great, that spooked the market. Markets respond to expectations and fear as much as to reality.
Second, geopolitical uncertainty. The US imposed a 50% tariff on Brazilian coffee in August, which was later partially rolled back. That created massive volatility. Suddenly the world's largest coffee importer was making Brazilian imports significantly more expensive, and nobody knew how long it would last or what it meant for supply chains.
Third, the EU's anti-deforestation legislation. It's been delayed, but the uncertainty around it added another layer of worry.
And fourth, we've seen volatility in daily movements, not only in price levels. The C Market has been swinging wildly within hours. That kind of volatility makes everyone nervous, and nervous markets are expensive markets.
You mentioned we bought these coffees back in 2025. How does timing work with all this volatility?
Roland: Good question. The Brazilian harvest happens June through August, but you don't export immediately. The coffee needs to be prepared and rested. Export starts around September, but the really good quality coffees we buy don't come out until November or December.
With the differential system you can lock your price at any time before export, but not after. So we, and our importers and exporters, are all making strategic decisions about when to lock in based on what the C Market's doing.
This year the timing meant we were locking in prices during some of those historic highs. Even though the C Market has come down a bit now, we were buying when it was at $4 plus per pound as the baseline, before our quality premiums were added.
The bigger picture
How does this compare to what's happening with coffee from other origins?
Roland: This is a real shift. Brazilian producers working on the differential model are getting phenomenally good pricing this year, sometimes even higher than Central American producers who we pay fixed, sustainable prices to. A Brazilian producer could easily be getting two or three times what they were paid a couple of years ago.
Is that fair? Reasonable? Right? Those are difficult questions. But I'm not going to begrudge them that, especially because of what's happening everywhere else.
In the rest of the world things are getting more balanced. For years we've been paying sustainable prices to our producer partners in places like Colombia, Nicaragua and El Salvador, prices well above the C Market that let them cover costs and invest in quality. But historically, many producers working with other buyers at or near C Market prices were losing money.
Now, with the C Market finally rising, even producers who don't have the luxury of working with specialty roasters are being paid above the cost of production. That's huge. We're seeing young people starting to show interest in coffee again. Some farms that had closed are reopening. There's still a massive labour shortage, but there's renewed hope.
For decades, most coffee producers working at or near commodity prices were losing money or barely breaking even. Now, for the first time in a long time, the baseline has risen to where they can actually make some money. Not a fortune, but something sustainable.
And in Brazil specifically, how are producers using these higher prices?
Roland: This is why our sourcing choices matter. We choose carefully who we buy from in Brazil, because we want to make sure this money goes to places where it'll have a real positive impact.
Take Nova Aliança. Yes, they're doing really well financially from us this year. But they've immediately invested that back into updating housing for their workers, supporting local schools, doing community outreach and making the farm more sustainable.
Our choices aren't about maintaining the lowest possible pricing for ourselves. They're about making sure that when we do pay more, which we are this year, it creates positive change.
Hidden costs beyond the beans
When the C Market goes up 50 cents per pound and we're paying our premium on top of that, does that translate to 50 cents more in our final costs?
Roland: I wish it were that simple. It costs us significantly more than just that increase, and this is something most people don't realise.
We don't buy directly from producers. We work with exporters in Brazil and importers here in the UK. They buy and sell the coffee to us, which means they need capital to do that. They're borrowing from banks to finance these purchases. When they ship coffee, they own it until they sell it to us, so they have money tied up in stock.
This is where it gets expensive: interest rates.
In the UK and worldwide, interest rates are much higher than they were 10 to 15 years ago. Lending isn't cheap any more. So every time coffee prices go up, importers and exporters need to borrow more money, and that borrowed money costs them more in interest.
For bigger importers this is becoming a critical issue. They're buying and selling huge volumes, and they're struggling to buy the volume they need because it all costs so much more than it used to. They know they can sell it, that's not the problem. They literally don't have enough capital to buy what they need.
They're adapting, they're getting better at managing it, but their costs are increasing. And they pass those costs to us, and we have to pass them to you.
That higher C Market price creates higher operational costs throughout the entire supply chain. It's an extra layer that pushes prices up beyond the raw commodity cost, and I don't think that's going away any time soon.
Looking forward
The big question everyone wants answered: will prices come back down?
Roland: Nobody knows for certain, but I'll tell you what most people in the industry are thinking.
It seems very unlikely the C Market will drop back to where it was two or three years ago. Whether it'll stay at this year's levels or go even higher next year, that's possible. Most people I've spoken to agree that with the market around $3.50 now, we'd be surprised to see it drop below $3 next year.
Remember, historically the C Market spent 40 years between 80 cents and $1.50. Being at $3 or more now actually feels roughly in line with inflation over that period. What's notable is that it didn't happen gradually. The C Market stayed artificially low for decades, then shot up over the past few years.
I think it might drop back a little, but not by much. And from an economics perspective, if we have another bad harvest in Brazil, or problems with Vietnamese robusta production, which also affects arabica pricing, we could easily see the C Market climb to $5 per pound.
So what you're saying is this is the new normal?
Roland: I think so, yes. Climate change means extreme weather events are becoming more common in coffee-growing regions. Global demand for coffee continues to rise, particularly in places like China. Coffee inventories are at historically low levels.
All of that points to sustained higher C Market pricing. We're going to do everything we can to maintain stability in our pricing and absorb what we can, but fundamentally, I think these higher baseline prices are here to stay. And since we pay quality premiums on top of that baseline, our costs rise with it.
What this means for you
We know price increases are frustrating, especially when you're already budgeting carefully. But we hope this conversation helps explain why your Brazilian coffees cost more this year, and why we think those higher prices represent something important.
For the first time in decades, the baseline commodity price for coffee has risen to a level where even producers without access to specialty markets are receiving prices that cover their costs. For the producers we work with directly, who we've always paid sustainable premiums to, these higher baseline prices mean they're doing even better, and they're using those earnings to improve worker housing, support their communities and invest in sustainability.
Brazilian producers working with us are using record earnings to make real improvements. Producers in Central America who we've supported with fixed pricing for years are seeing the broader market finally catch up to what they deserve.
Those are real changes in real people's lives.
We remain committed to sourcing excellent coffee while making sure the people who grow it are treated fairly. We've always paid well above commodity prices, and that's why we're transparent about pricing, even when the news isn't what anyone wants to hear.
If you have questions about specific coffees, our pricing, or anything else, drop us a line. We're always happy to have these conversations.
Team Ozone
Want to learn more about how we source coffee and work with producers? Explore our Journal for more origin stories, producer profiles and insights into the specialty coffee supply chain.
Roland Glew is the Green Buyer for Ozone Coffee Roasters and the founder of Strategic Coffee Sourcing.