UAE coffee drinkers face inevitable price hikes as Arabica bean costs soar

The surge in global Arabica prices — driven by lacklustre harvests from Brazil, erratic weather linked to climate change and a series of tariff shocks — is filtering into the UAE at a delicate time. Dubai has solidified its role as a global re-export hub, with coffee re-exports now exceeding Dh3.5 billion. That growth has helped cement the city as a central artery in global supply chains, but it also exposes local roasters and cafés to price waves hitting the international market.

Italian roaster Illycaffè, a major player in the UAE through longstanding distribution partnerships and branded cafés across malls including Dubai Mall and Mall of the Emirates, says prices may remain high for longer. Chief Executive Cristina Scocchia confirmed plans to raise prices again in January after two hikes this year, saying: “There is a limit to how much a company can absorb a level of green coffee price, which is so unhealthily high.”

Her remarks to Bloomberg reflect the strain across the entire supply chain. Global prices spiked after US tariffs on Brazilian coffee, the world’s largest producer, collided with weak harvests elsewhere. Though Washington later expanded tariff breaks for Brazilian beans, the relief has yet to translate into a meaningful drop in wholesale prices. Illy expects unroasted beans to stabilise only between $2.80 and $3 per pound by the second half of 2026 — still well above the five-year average.

Executives from the industry’s largest brands say the same thing: this isn’t a temporary spike. Giuseppe Lavazza, Chairman of Lavazza Group, recently bluntly stated: “Coffee prices are not going to go down; [they’re] going to stay very high. The coffee supply chain is dramatically under pressure.” His concerns stem from extreme weather and tightening regulations, including the EU’s new deforestation rules.

Starbucks is also feeling the strain. CEO Brian Niccol last month acknowledged that bean costs have jumped roughly 30% during one period this year, squeezing margins even for a company that hedges aggressively. He said Starbucks would avoid raising prices “as a last resort”, but would do so “very surgically” if the surge persists — a sign that even the biggest chains are bracing for tougher months ahead.

Nestlé, maker of Nescafé and Nespresso, has also moved. CEO Laurent Freixe recently confirmed the company has been forced to raise prices, saying, “We are trying to take as much price as we can to cover our costs while being mindful of the consumer response in a competitive environment.” David Rennie, who heads Nestlé’s coffee brands, summed it up simply: “We are not immune to the price of coffee, far from it.”

For the UAE, the challenge is amplified by its reliance on imports. Nearly all coffee consumed in the country is shipped from major producing regions such as Brazil, Ethiopia and Colombia. When global prices rise by 70–90%, as they have in several recent stretches, the UAE will feel the heat too.

Specialty cafés — which overwhelmingly use premium Arabica — are among the most exposed. Operators say they have already faced wholesale increases of 10–20% because of bean shortages, rising freight costs and distribution overheads. Many have absorbed the increases to avoid alienating customers, but industry watchers now expect more cafés to adjust their pricing.

Coffee merchants and roasters say the volatility is unlike anything seen in years. Some describe 2025 as an “unprecedented time” for the global coffee economy, with farmers, exporters, roasters, baristas and consumers all feeling the impact simultaneously.

Despite the turbulence, UAE coffee demand remains resilient. Illycaffè reports steady growth in both retail and café traffic. The brand’s wide distribution through hotels, restaurants and supermarkets has helped cushion rising costs while maintaining sales volumes.

Roasters say UAE consumers have shown an appetite for higher-quality beans even as prices edge higher. The country’s café scene, shaped by a young, globally connected population, has pushed local operators to innovate, upgrade machinery and expand sourcing partnerships.

That willingness to pay for quality may be tested in the months ahead. Experts say that unless bean prices fall significantly — something few executives now expect — the UAE could face another round of menu adjustments across mid-range cafés and premium outlets alike.