The global price of your morning coffee has basically nothing to do with how many beans are actually being grown anymore.
SSRN · March 18, 2026 · 6432738
The Takeaway
While we assume commodity prices reflect supply and demand, research shows that coffee prices are now driven by speculative financial positioning and institutional 'price discovery' that ignores physical fundamentals. This mechanism allows downstream corporate buyers to stay insulated from price risks while keeping farmer incomes suppressed even during periods of extreme scarcity.
From the abstract
1. AbstractRecent evidence shows widening divergence between export and retail coffee prices, compressing farmer incomes while downstream profits rise, even as export prices remain closely aligned with institutional indicators: the KC futures contract and the ICO indicator system. Motivated by this tension, this study examines the relationship between physical markets and dominant pricing institutions. Using time-series regression analysis, including VAR and VECM specifications, we find that the