As of 12 September 2026 our coffee prices will increase $3 per kg and $0.60 per 200g. The South Island free freight threshold moves from $40 to $50.
Why the price is moving
We had a modest price increase in February 2025 when coffee prices set new historical records. We absorbed most of that increase in the expectation that coffee prices would come down significantly. They did not and we are effectively still catching up.
It is pretty clear now that coffee prices are going to stay at a much higher base price than 2 years ago and the decade before that.
The stockpiles that used to buffer prices are gone and there is a tight balance between supply and demand. In addition, elevated oil and energy prices have worked their way into freight, roasting, packaging and fertiliser costs.
Climate extremes are affecting coffee supply. Last year it was a drought in Brazil and Vietnam, this year it has been persistent rain in Brazil that seems to be the major factor that drives up prices. Now farmers are starting to hold back coffee in anticipation of reduced crops next year. More heat and drought in the main coffee growing areas of Brazil and Vietnam are expected in the coming months due to a super El Niño. The harvests in Peru and heavyweight Colombia were down in 2026 and both countries will also see the effects of El Niño. Peru is the largest organic coffee producer which means that premiums for organic coffee are going up even more. In the long run, improvements in, and increase of, coffee plantations seem to be negated by incremental weather effects, and it looks like climate change will have the upper hand. It looks like there will be a lot of see-sawing with a relatively good year followed with a bad year, and this uncertainty alone will keep global coffee prices up.
Why is the South Island free freight threshold going to $50?
We are based in the North Island. Average freight costs of getting coffee to the South Island have gone up too much to maintain the current $40 threshold.
For 20 years we have been committed to increase the market for organic coffee. Organic coffee is almost without exception shade grown, in compost-rich soils with much higher moisture content, making organic plantations more resilient to climate extremes and creating more moderate micro climates. These conditions produce the best and pesticide-free coffee. Our commitment to organic coffee is unwavering and we try to keep our price increase to a minimum, passing on our cost increases.
For the longer background, see Coffee price shock: Justified? (January 2025).
A few questions
Why does organic coffee go up if El Niño hits conventional coffee hardest?
The market for certified organic coffee is very small, some 3%. All organic coffee is hand-picked and shade grown. Organic coffee yields per ha are lower than conventional, although organic plantations often have better yields when other crops and family food supply are factored in. Organic coffees are often of very good quality because the organic conditions mimic coffee's preferred environment. On the other side, there is the demand for pesticide-free products. So, organic coffee is a premium product. Its price is by and large reflected as a premium on top of conventional coffee. That premium is around 0.3–0.4 US$/lb but can increase significantly with quality and shortage of supply in a relatively stable demand market. It takes 3–5 years to convert non-organic farms into organic farms, so once farmers have gone non-organic it is hard to get them back. A lot of organic farms historically were established in virgin forests. That practise is luckily reducing but it means that organic production is not growing much and premiums for organic coffee are likely to increase, provided consumers remain committed.
Brazil and Vietnam produce about 60% of all coffee. Those crops are largely conventional: sun-grown, fertiliser-fed, and the most exposed when heat and drought hit. Shade-grown organic coffee is more resilient. Trees and organic soil hold moisture and organic roots go deeper. That is why well-run organic farms should come through a climate stressed environment in better shape. Having said that, they are affected by the lower rainfall and heat extremes that envelope entire continents. Just a small increase in temperature makes coffee beans ripen faster, with less time to grow in volume, affecting the yield. Unusual rain in the flowering season will also affect organic farms badly. When harvests are down and prices are up, small organic farmers can still make good profits when cash buyers buy coffee without organic certification. This is a problem when prices are high, there is financial incentive for small organic farmers to drop the hassle of organic certification and opportunistically make hay whilst the sun shines.
Do subscriptions still save 6%?
Yes, on website pricing. If you are on an older subscription rate, we will write to you separately as there might be some additional adjustments.
Questions: coffee@incafe.co.nz