How currency fluctuations influence coffee sourcing

Estimated reading time: 7 minutes

Key takeaways

• Coffee trades in US dollars but is paid for in many currencies.
• Currency swings determine who wins local bidding wars at origin.
• Local price falls hit producers harder than US dollar conversions suggest to buyers.
• Long-term sourcing relationships protect buyers better than chasing currency advantages.

Coffee prices are climbing again, but the story is not the same everywhere. Currency markets are reshaping who feels the rise and by how much.

Arabica and robusta futures are set by trading on stock exchanges in New York and London. Coffee itself, however, changes hands in a dozen currencies as it moves along the supply chain. A producer is usually paid in local currency, whether that is the Colombian peso, the Brazilian real, or the Ethiopian birr. Traders typically sell on to exporters in US dollars, while roasters buy in whatever currency they operate in, from the euro to the Turkish lira to the British pound.

Each stage of the supply chain is exposed to a different currency swing at a different moment. A weak peso can hand a Colombian exporter an advantage over local buyers even while a Brazilian real rally discourages growers from selling at all. The result is a market that appears unified on the surface but behaves very differently across the value chain.

You may also like our article on how foreign exchange affects the price of coffee.

A second-order force with first-order consequences

Emily McIntyre, chief executive of Swift Coffee Sourcing, sees currency fluctuations as a secondary factor rather than the main driver of coffee prices. She points instead to the C market, geopolitics, weather, freight, and interest rates as the larger forces at work.

“In my opinion, exchange rates are more of a second-order factor of coffee pricing,” she says.

Where currency does matter, Emily argues, is in how it changes behaviour on the ground. She cites Ethiopia’s repeated birr devaluations and its 2024 float as a case in which producers and exporters began hoarding coffee, side-selling it, or renegotiating contracts, which affected pricing well beyond Ethiopia’s borders.

The mechanics behind this are straightforward. Exporters typically sell in US dollars, so the strength of the local currency shapes how competitive their offers are against local buyers. A strong local currency against the US dollar limits exporters to matching what local buyers already pay. A weaker one lets them buy more coffee per dollar and outbid the domestic market.

“It’s usually on the origin side that the real impact of currency exchange is felt, as buyers are largely transacting in US dollars or other primary currencies,” Emily says.

Earlier this year, the Colombian peso and the Brazilian real both strengthened against the US dollar, a shift partly tied to a real rally that has discouraged export sales by Brazilian producers. Ethiopia, meanwhile, continues to see very low domestic prices, a legacy of the birr’s 2024 float.

“Foreign exchange shortages and the central bank surrender requirement have created an entire business model where coffee exporters will work at a loss, simply to access dollars,” Emily explains. She contrasts this with Peru, where a more stable sol keeps currency risk lower. Speculation there tends to centre on harvest timing and quality rather than exchange rates.

Producers absorb losses that buyers rarely see

Buyers generally want lower prices to secure reliable supply, while producers need higher prices to remain financially stable. 

This tension is particularly visible in Colombia. As Belco’s Angel Barrera notes in a recent LinkedIn post, domestic coffee prices in Colombia hit a record COP 3,338,000 per 125kg bag of parchment in February 2025, worth roughly US$756 at the time according to the USDA’s Foreign Agricultural Service. By late July 2026, the local price had fallen to COP 2,244,000, down about 33%, according to Colombia’s National Federation of Coffee Growers.

Converted into dollars, the situation changes considerably. At current exchange rates of just over 3,130 COP to one US dollar, that same bag now works out to roughly US$671, down about 11% from the February 2025 peak.

Colombian farmers are therefore absorbing a far steeper loss in local terms than international buyers ever see in dollar terms, and the gap arrives at a difficult moment for growers. Fertiliser costs remain high, labour is scarce, and many farmers have already spent last year’s earnings on farm renovations.

As a result, producers increasingly expect quality premiums to hold, so prices may not soften as much as buyers hope. Currency conditions also look unlikely to settle quickly, given continued pressure on the US dollar, wider geopolitical tensions, and Colombia’s polarised political climate following its recent presidential election.

Currency risk is relationship risk in disguise

Emily frames price volatility as a relationship problem more than a currency problem. “Currency risk in coffee is really counterparty and supply chain risk in disguise,” she says. “When exporters or importers chase FX-driven price advantages, it’s a losing equation for everyone.”

Switching origins is rarely simple in specialty coffee. Matching cup profiles, logistics knowledge, and quality control systems takes far more work than finding a lower price, Emily says. “Loyalty coupled with professionalism means that a buyer stays at the top of the pile, gets the most access, and will be the last cut out in a shortage,” she adds.

This dynamic loosens for commodity-grade coffee, where buyers substitute origins more freely. Emily points to Peru absorbing extra demand during Brazil’s 2025 harvest struggles. Peru now faces its own pressures ahead of the 2026 harvest, prompting some buyers to pause purchases or look elsewhere.

Chasing currency swings from origin to origin is tempting but short-sighted, since specialty coffee depends on trust, consistency, and cup quality more than spot pricing. Buyers who treat sourcing relationships as a long-term hedge, rather than a transaction reset every cycle, are better placed to withstand whatever the next currency shift brings.

The coffee trade has never had a single price. The risk, and the opportunity for those who manage it well, lies in the distance between different currencies across the supply chain.

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Coffee price FAQs

Do exchange rates drive coffee prices?

Not directly. Emily McIntyre calls them a second-order factor behind the C market, along with geopolitics, weather, freight, and interest rates. Their real impact comes through behaviour at origin, where devaluations prompt hoarding, side-selling, and renegotiated contracts that ripple through pricing.

Why do farmers and buyers experience price falls differently?

Producers are paid in local currency while trade happens in dollars. Colombia’s reference price dropped roughly 33% in pesos from its February 2025 peak, but a strengthening peso means buyers saw only an 11% decline in dollar terms.

Should buyers switch origins to chase favourable exchange rates?

Rarely. Matching cup profiles, logistics knowledge, and quality control takes far more than finding a lower price. Emily argues loyal, professional buyers get the best access and are the last cut in a shortage, while chasing FX advantages hurts long-term.

Photo credits: Emily McIntyre

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