Trade and geopolitical tensions on coffee routes

The global coffee supply chain is built around two major botanical varieties: Arabica and Robusta, which we discussed in the article Arabica and Robusta: the two souls of Italian coffee.

Coffee trade routes

Arabica, known for its aromatic complexity and climate sensitivity, is historically associated with Central and South American countries such as Brazil, Colombia, Guatemala, Honduras and Mexico, which supply a large share of the green coffee used in Italian and European blends.
Robusta, more resistant (indeed "robust") and richer in caffeine, is instead predominant in Southeast Asian countries such as India, Vietnam and Indonesia and is often used in espresso blends for greater body and a thicker crema.

These coffee trade routes connect producing ports with consumption hubs in Europe, North America and Asia, mainly by sea through strategic waterways such as the Suez Canal and the Strait of Hormuz, key nodes for global logistics but also critical points exposed to geopolitical tensions.

Tariff policy, Venezuelan crisis and conflicts in the Middle East

In recent years the coffee supply chain has had to face a series of interconnected geopolitical shocks.

US tariff policy

Uncertainty surrounding United States trade policies, including tariffs on imports from producing countries (such as Brazil, Colombia and Vietnam) and threats of further protectionist measures on the import of finished products also from European countries, has already begun to reshape coffee trade flows.

According to market analysts, high tariffs may push importers and producers to diversify markets and trade agreements, with impacts on costs for roasters and final consumers.

Venezuelan crisis and impact on production

Venezuela, a country that in the 19th century was among the world's leading coffee producers and that today has seen a significant production recovery compared to recent years, remains an example of how political and economic stability is essential for the supply chain. Institutional instability, difficulties in accessing agricultural inputs and security conditions can negatively affect production, even if recent data report increases in harvests compared to the recent past.

Conflicts in the Middle East and threats to maritime routes

The war in Gaza, which began in 2023, and the subsequent attacks by militias - in particular the Houthi rebels in Yemen against commercial vessels - have seriously disrupted navigation in the Red Sea and the Bab-el-Mandeb. This stretch is the southern gateway to the Suez Canal, the main link between Asia and Europe, also vital for many coffee shipments from Asian ports. Shipping companies have often chosen alternative routes, sailing around Africa via the Cape of Good Hope, increasing transit times and transport costs.

Escalation of the conflict between the United States and Iran

The recent escalation of the conflict involving the United States, Israel and Iran has even led to the temporary closure of the Strait of Hormuz, another strategic crossroads, forcing major companies such as Maersk and Hapag-Lloyd to suspend or divert transits through Suez and the Bab-el-Mandeb.

What may happen to coffee prices: market scenarios

Disruptions and slowdowns along major trade routes are reflected in the prices of agricultural commodities, including coffee futures. Coffee, in addition to facing growing global demand and historically low inventories, is directly affected by any increase in logistics and transport costs, as well as by speculative uncertainty in financial markets.

Tariffs, logistical shocks and longer maritime routes tend to push shipping costs upward, which then - with a certain delay - are reflected in the final prices paid by roasters and consumers.

According to international bodies, a shock in raw material prices takes about one year to pass through to retail prices of coffee, with effects that may persist for years.

Outlook: short, medium and long term

Short term (0-12 months)

In the short term the market reacts mainly under the pressure of emergency and uncertainty. At this stage, higher transport costs, increased insurance premiums for high-risk routes and financial volatility in commodity markets have an immediate impact. Companies have limited room for manoeuvre: supplies already under contract follow established paths, while possible increases are gradually reflected in wholesale prices.

• Pressure on logistics costs: with longer alternative routes and initial market reactions, transport and insurance costs are likely to remain high.
• Price volatility: the combination of uncertain tariffs and geopolitical risks will keep volatility high in coffee futures markets.

Medium term (1-3 years)

The medium term is the adaptation phase. Companies renegotiate contracts, diversify suppliers and routes, assess new sourcing areas and reorganise logistics. Governments and financial operators also partially stabilise their strategies. Over this time frame, the effects of the initial shocks may consolidate into new price equilibria, less linked to emergency conditions and more to structural transformations of the supply chain.

• Adaptation of supply chains: companies and producing countries may strengthen regional agreements or invest in alternative logistics infrastructure to mitigate risks.
• Diversification of origins: greater attention to non-traditional African or Latin American production may reduce dependence on critical routes.

Long term (over 3 years)

The long term is the horizon in which the deepest structural changes emerge. If geopolitical tensions persist, trade routes may be permanently rethought, with infrastructure investments, new international agreements and a different production geography. In this perspective, the coffee market does not merely react to events but evolves, redefining balances between producing areas, importing countries and consumption models.

• Redesign of global trade routes: if geopolitical tensions continue, we may witness a lasting reshaping of major maritime routes, with investments in new transport technologies or land corridors.
• Sustainability and resilience: climate, social and geopolitical issues will push the coffee supply chain towards more resilient models less exposed to concentrated shocks.

The other side of globalised markets

Understanding the geopolitics of coffee routes does not simply mean following military or tariff-related news. It means recognising the deep connections between distant territories and everyday gestures.

Globalised markets have made possible a wide, continuous and high-quality offer: blends composed of different origins, counter-seasonal harvests ensuring constant availability, and trade flows capable of supporting millions of producers and workers along the supply chain. Yet this same interconnection also represents an element of fragility. When a political crisis hits a producing country, when a conflict makes maritime routes unsafe or when a tariff decision alters trade balances, the effects quickly spread along the value chain. The coffee bean, a symbol of exchange and shared culture, thus also becomes a sensitive indicator of international tensions.

Producers, traders, roasters and consumers are part of a single system. In this complex scenario, staying informed with balance and without ideological bias becomes essential. For those who, like us at Il Caffe Manaresi, live the coffee supply chain every day, this means taking responsibility for observing the global context with clarity, explaining dynamics with rigour and continuing to promote quality and transparency, even in times of uncertainty.