While we have a large range of coffee pages on our website, the best place to keep in touch with our current and upcoming range of coffee are our weekly Specialty and Conventional offer lists.
If you keep an eye on these, you may notice that prices can change from week to week, or even day to day. Sometimes these changes are subtle. Other times they are more noticeable. This can feel confusing, particularly when the coffee itself hasn’t changed.
So, why do coffee prices change on our offer lists?
Coffee is simultaneously an agricultural product, a traded commodity and an international export/import. Intersecting these spaces, coffee is susceptible to many different types of variables such as weather, politics, currency and markets.
In reality, these price movements reflect how coffee is bought, sold, and managed globally. This article explains the three main forces behind price changes on our offer lists:
Currency exchange
The coffee market and hedging
The differential above (or below) the market
Understanding these elements helps explain not only why prices move, but how this system also supports producers, creates more predictability in the supply chain, and creates fair, transparent pricing for customers.
Coffee Is Bought Globally, but Priced Locally
Green coffee is traded internationally, with most contracts priced in US dollars per pound (USD/lb). However, our offer lists are published in Pounds Sterling per kilogram (£/kg).
This matters because exchange rates change constantly, and sometimes drastically, as we have seen recently with current global political situations.
Some of the coffees on our Specialty and Conventional offerlists are purchased what we call outright, at a fixed USD price. When this happens, the final GBP or EUR price depends on the exchange rate at the point we convert that cost in creating a Sales Contract.
If the pound weakens against the dollar, coffee becomes more expensive in GBP/EUR terms. If the Pound or Euro strengthens, the price of the coffee on our offerlists can come down, even though the underlying cost of the coffee in USD hasn’t changed.
As a result, currency movement alone can cause prices to adjust. This is true for coffee bought outright and those which are linked to the coffee market, but is particularly noticeable for outright coffee as this is the main factor which will change its price on our offerlist. These changes are not discretionary, but reflect real costs, and tend to relate to high-quality coffees that demand a higher price, but can also apply to some of our volume coffees
The Coffee Market
Alongside currency, many coffees on our offerlists are linked to the Arabica coffee futures market, commonly called the C‑market. This is a global reference price, traded daily on the ICE exchange, quoted in USD per pound. Any coffees that are linked to the C-Market can be hedged, and their pricing could fluctuate with both Arabica Futures and currency. However, most hedged coffees are not priced at the market, but relative to it on something called a Differential.
A hedged coffee’s price is usually made up of two parts:
Market price + differential
The market price is the level of the C-Market on a given time, while the differential is the value added above (or sometimes below) the market price to reflect everything that makes a coffee unique. You can read more about differentials in this article.
A high-volume Brazilian coffee on our Conventional Offerlist will typically carry a lower differential than a Single Farm Brazilian coffee on our Specialty List, due to differences in traceability, quality and processing.
Differentials do also change, adding a third variable to the price of coffee. These are set by the supplier at origin and are affected mostly by the availability of coffee at any given time. While market variations can happen relatively quickly, differentials change slower and more gradually, reflective of supply and demand and market conditions.
Working with hedged coffee allows each actor in the supply chain to fix prices at different points in time (by applying their differential to the prevailing market price); this delivers distinct advantages depending on their position within the chain.
What This Means for our Offer Lists
Hedging does not freeze prices indefinitely and it doesn’t remove market movement. Instead, it allows pricing to reflect real market conditions without destabilising the supply chain.
This means:
When the market rises, prices adjust upwards accordingly
When the market falls, prices will move down
Hedging helps avoid sudden shocks or artificially inflated pricing, as it reflects real market movements. Customers can also benefit from this function through continuity and reliable forward pricing which helps with planning ahead. They can also enjoy lower prices on their coffees when they book hedged coffee during a falling market, which is not available on coffees offered if bought outright.
Why Prices Change Regularly
In summary, it’s normal for prices to move differently for different coffees. This is because:
Some coffees are bought outright rather than hedged
Currency exchange rates change independently of the coffee market
Market prices update throughout the day, every day
Differentials occasionally adjust based on supply or quality
Updating prices daily ensures that our offer lists reflect current, real‑world costs. So, although this can be confusing at times, it enables us to deliver the most accurate pricing at any given time so we can deliver coffee to our customers at the best price possible – without this function, the margin on our offer lists would be larger to manage the risk. It also enables us to move with the market, enabling customers to take advantage of any downturns.
If you would like to learn more about this, or are interested in receiving our weekly offer lists, please get in touch with your trader at trade@drwakefield.com or eutrade@drwakefield.com.
