The £5 coffee that tells a story of global economic turmoil
BBC Business writer Faisal Islam explores why London coffees now reach £5 a cup: tariffs, climate change and Gen Z consumer tastes. Farmers in Brazil, Colombia and Ethiopia are tracking global markets more closely and pricing nimbly. The story uses the coffee value chain to illustrate broader tensions running through the world economy.
BBC Business economics editor Faisal Islam argues that the £5 coffee in London is the product of three pressures layering on top of one another. The first is tariffs: the Trump administration's continuing trade policy raises shipping and insurance costs on coffee beans crossing borders. The second is climate change: erratic rainfall, harvest variability and the cost of shifting to drought-resistant varieties lift production costs in Brazil, Colombia and Ethiopia, the three biggest origins.
The third factor is consumption. Gen Z customers spend longer in cafés, pay more for single-origin beans and speciality brewing methods, and accept higher per-cup pricing. That demand makes it easier for retailers to pass tariff- and climate-driven cost increases through to the till. At the same time, large grower cooperatives in Brazil and Colombia have grown sophisticated about futures markets and currency hedging, and are timing their sales nimbly.
A Brazilian coffee exporter quoted in the article captured the dynamic: 'Our ability to arbitrage between bourses has never been higher.' In coming months the Brazilian harvest, Ethiopian rains and the Trump administration's tariff posture will shape where coffee prices go from here. This article is not personal shopping or commodities investment advice.
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