At the end of July, Fairtrade International announced an increase in the Fairtrade minimum price for coffee, which will come into effect on 1 December 2026.
The minimum price for washed Arabica (which accounts for over 80% of all Fairtrade coffee sold worldwide) has increased by $0.20/lb to $2.00/lb, and the minimum price for natural Robusta has increased by $0.10/lb to $1.30/lb. This is the result of a year-long review, which included a consultation with more than 600 stakeholders across the supply chain, which we at DRWakefield were a part of.
The increase has come about to reflect the ever-increasing cost of production and living that farmers are facing across the world. Plus, the historically high market conditions we have seen in the last couple of years. One of the key drivers of higher cost of production is the cost of fertiliser, which has rapidly increased since Russia invaded Ukraine in 2022. Russia is one of the world’s biggest producers of fertiliser and the components that make it up, and was one of the biggest exporters, but the war in Ukraine, and the sanctions that came about as a consequence, meant this was disrupted. As a result, fertiliser grew more and more expensive. Other factors, such as a global rise in the cost of fuel, have also impacted the cost of production. In short, farmers are facing a very different reality in 2026 than they were just a few years ago.
The Fairtrade minimum price is a price floor, meaning you cannot buy Fairtrade washed Arabica for less than $2.00/lb after the new rules come into effect, but the price of Fairtrade coffee can be higher than this. In reality, the NY coffee market has not been below $2.00/lb in over 2 years, since March 2024. Meaning, whilst the market remains so high, importers and roasters are unlikely to feel like pinch. Rather the new minimum prices are a protection for farmers for when the market next drops.
The last time the minimum price was increased was in 2023. This was the first increase since 2011, and caused quite a stir among the industry as it was raised by $0.40/lb for washed Arabica and $0.20/lb for natural Robusta. This was a fair reflection on the cost of production and living increases across the world, but was a serious jump for importers and roasters. The market conditions of the time were also considerably different. Sitting around $1.50/lb in the summer of 2023, meaning the increase from $1.40/lb minimum to $1.80/lb minimum was felt by buyers straight away. Off the back of this Fairtrade decided to review the price more regularly to keep it more in line with the realities of the market, ensuring farmers get a fairer price and the increase is not so significant that buyers are no longer able to keep buying their Fairtrade coffee.
Whilst the minimum prices have been increased, the other parts of the Fairtrade pricing structure are to remain unchanged. This includes the Fairtrade Premium and the Fairtrade Organic differential. The Fairtrade Premium remains at $0.20/lb, and is a premium included in the price of Fairtrade coffee which is kept separate and goes directly to Fairtrade cooperatives to spend how they best see fit for their community. This could be improving processes facilities, offering agronomy support and education or as bonuses to cooperative member farmers, to name just a few. The Fairtrade Organic differential will remain $0.40/lb. This is an additional premium farmers receive for any coffee they sell as both Fairtrade and Organic certified. These two premiums have remained the same based off the feedback from the pricing review.
If you have any questions, don’t hesitate to reach out to your account manager or a member of our team.
Key changes:
- Washed Arabica, increase from $1.80/lb to $2.00/lb
- Natural Arabica, increase from $1.75/lb to $1.95/lb
- Natural Robusta, increase from $1.20/lb to $1.30/lb
- Washed Robsusta, increase from $1.25/lb to $1.35/lb
- The Fairtrade Premium will remain the same at $0.20/lb
- The Fairtrade Organic differential will remain the same at $0.40/lb
