How a coffee price is made
What a green coffee price is built from – a futures reference, a negotiated differential and the contract that fixes them – and what freight, duty, financing and roast loss add on the way to the cup.
Contents
In brief
- Green coffee is commonly priced as a futures reference plus a differential: ICE Coffee “C” in US cents per pound for arabica, ICE Robusta in US dollars per tonne.1,2,3
- The differential is not published. Buyer and seller negotiate it for each origin and quality.4
- Under a price-to-be-fixed (PTBF) contract the differential is agreed first; the futures part is fixed later against the exchange.3,4
- One US cent per pound equals about USD 22.05 per tonne (1 lb = 0.45359237 kg).22
- As of October 2026, the latest ICO composite indicator monthly average is 262.18 US cents per lb (September 2026).5
Two parts: futures and differential#
Much green coffee is not sold at a single posted price. Its price is commonly built from two parts: a reference price set on a futures exchange, and a differential agreed between buyer and seller.3,4
For arabica, the reference is the Coffee “C” futures contract of ICE Futures U.S. in New York. It is quoted in US cents per pound (lb), and one contract (a lot) is 37,500 lb of green coffee.1 For robusta, the reference is the Robusta futures contract of ICE Futures Europe in London. It is quoted in US dollars per tonne, and one lot is 10 tonnes.2 How these markets work is explained in Coffee futures.
The differential is the gap between the futures price and the price of one particular coffee.3 It can be a premium (plus) or a discount (minus). Unlike the futures price, it is not published anywhere. It is negotiated for each deal and reflects quality, origin and supply and demand at origin.4 Each differential belongs to one lot: a batch of coffee from one origin and process, traded as a unit. Quality is part of what the differential prices (see Green coffee grading).4
What moves the differential#
The exchange itself treats origins differently. Coffee delivered against the “C” contract from Colombia, Costa Rica or Kenya earns a fixed premium, while coffee from Brazil is delivered at a discount.1 The rule behind this is stated in the contract: coffees judged better are at a premium; those judged inferior are at a discount.1
In physical trade the differential carries more than quality. It blends origin, quality and supply and demand in the producing country, and it is the outcome of a negotiation.4 Certification can add to the price. Fairtrade sets a minimum price, and its Premium is paid on top of the minimum or the market price, whichever is higher.16 Differentials usually move less than the futures price, but not always.4
When each origin harvests and ships is shown in Harvest calendars.
Fixed now or fixed later#
There are two common ways to set the price in a contract. In an outright contract, buyer and seller agree one complete price at once. In a price-to-be-fixed (PTBF) contract, they agree the quantity, quality, shipment month and differential first. The futures part stays open.3
The open part is fixed later against the futures market, for example when the buyer buys the physical coffee.4 The final price is the futures price on the fixing day plus the agreed differential.3 Forward contracts like these let producer organisations know what they will be paid and use the contract as collateral for loans.4
Units: cents per pound, dollars per tonne, price per bag#
Prices for the same coffee appear in several units. One pound is exactly 0.45359237 kg.22 So one US cent per lb equals USD 22.046 per tonne, or about USD 0.022 per kg (our arithmetic). Production statistics are often given in bags of 60 kg; the textbook chapter gives world arabica production this way.3
| Price | USD per kg | USD per tonne | USD per 60-kg bag |
|---|---|---|---|
| 100 US cents per lb | 2.20 | 2,205 | 132 |
| 200 US cents per lb | 4.41 | 4,409 | 265 |
| 300 US cents per lb | 6.61 | 6,614 | 397 |
Conversions are our arithmetic from the definition of the pound.22 For a contract that names another bag weight, such as 69 or 70 kg, multiply the price per kg by that weight instead.
From the port of origin to the cup#
Most export contracts state a price “free on board” (FOB): coffee loaded on the ship at the port of export.17 Buyers who buy FOB arrange and pay for sea freight and insurance themselves.3 Then come import duty, port and clearance costs, inland transport and the interest on money tied up in stock. The sum is the landed cost.
Import duty on green coffee is low in the main European markets. As of October 2026, green coffee that is not decaffeinated enters the European Union (EU) free of customs duty.7,8 Roasted coffee pays 7.5%.7,9 As of October 2026, green coffee imported into Switzerland carries a guarantee fund contribution of CHF 0.12 per kg, which finances the country’s compulsory coffee stocks.10,11
Roasting removes weight. According to a 2020 multi-study paper, beans lose 15–22% of their weight in the roaster, mostly water.21 A kilo of roasted coffee therefore needs more than a kilo of green coffee, and its green-coffee cost is higher per kilo (see Roast loss).
A worked example#
The figure follows one example kilo from the exchange to the roasted bean. All values are example values, rounded, chosen for illustration; they are not market quotes. They are the default values of the calculator below. The table under the figure lists each input and step.
Data table
| USD per kg (example) | Source | |
|---|---|---|
| Futures price (300 ¢/lb) | 6.61 | |
| Differential (+40 ¢/lb) | +0.88 | |
| FOB price | 7.50 | |
| Sea freight | +0.13 | |
| Insurance | +0.02 | |
| Import duty (EU, 0%) | 0.00 | |
| Other import costs | +0.40 | |
| Financing | +0.12 | |
| Landed cost, green | 8.17 | |
| Roast loss (18%) | +1.79 | |
| Roasted coffee | 9.96 |
| Step (example) | USD per kg |
|---|---|
| Futures price, 300 US cents per lb | 6.61 |
| Differential, +40 US cents per lb | +0.88 |
| FOB price | 7.50 |
| Sea freight (USD 2,500 ÷ 320 bags of 60 kg) | +0.13 |
| Insurance, 0.3% | +0.02 |
| Import duty, 0% | 0.00 |
| Other import costs | +0.40 |
| Financing, 6% a year for 3 months | +0.12 |
| Landed cost, green | 8.17 |
| Roast loss, 18% (landed cost ÷ 0.82) | +1.79 |
| Roasted coffee, green-coffee cost only | 9.96 |
Example values, rounded to the cent; our calculation with the formulas of the calculator below.
In this example the FOB price is about USD 7.50 per kg and the landed cost about USD 8.17 per kg. After 18% roast loss, the green coffee in one roasted kilo costs about USD 9.96. A cup made with 18 g of roasted coffee then contains about USD 0.18 of green coffee. Roasting, packing, labour, rent and margin come on top.
Enter your own price, unit and costs in the calculator. It shows the landed cost per kilo, per bag and per tonne, the cost per roasted kilo and per cup, and converts between price units.
Green coffee cost calculator
From an origin price to the cost of a cup: futures plus differential or an outright price, freight, insurance, duty, financing and roast loss. Converts cents per pound, dollars per tonne, per kilo and per 60-kg bag.
Landed cost, green coffee
Green coffee only: no roasting, packing, labour, rent or margin. The example values are for illustration, not market quotes.
From the origin price to the roasted kilo
ICE Coffee “C” futures (New York) are quoted in US cents per pound; one lot is 37,500 lb
Premium (or discount, negative) for this origin and quality, agreed with the seller
Free on board: loaded on the ship at the port of origin
Example value; ask your forwarder
Example: 320 bags = 19.2 t
Example value; ask your insurer
Enter your country’s rate for green coffee
Port, clearance, inland transport, warehousing. Example value
Interest on the landed value while the coffee is paid but not yet sold. Example: 6% for 3 months
Beans lose 15–22% of their weight in roasting, mostly water (see Roast loss)
Your recipe: for example a double espresso or a large filter cup
Prices and freight are entered in US dollars, as coffee is usually traded
Your FOB price in other units
| Unit | FOB | Landed |
|---|
1 lb = 0.45359237 kg, so 1 US cent per lb = 22.046 US dollars per tonne. A bag is 60 kg, the unit the International Coffee Organization uses for its statistics.
How the calculation works
Outright or price to be fixed. An outright contract fixes one price. Under a price-to-be-fixed contract, buyer and seller agree the differential now and fix the futures part later; the price is futures plus differential.
Futures markets. Arabica trades on ICE Futures U.S. as Coffee “C”, quoted in cents per pound, 37,500 lb a lot, with March, May, July, September and December contracts. Robusta trades on ICE Futures Europe in US dollars per tonne, 10 tonnes a lot, with January, March, May, July, September and November contracts.
Steps. FOB + freight per kg (freight ÷ bags × 60) = cost and freight; + insurance = CIF; + duty on CIF; + other import costs; + interest for the months financed = landed cost. Roasted cost = landed ÷ (1 − roast loss). Per cup = roasted cost × grams per cup.
Where prices stood in October 2026#
The International Coffee Organization (ICO) publishes daily indicator prices for four groups of coffee and a composite of them, the ICO composite indicator price (I-CIP).5 As of October 2026, the latest complete month is September 2026. That month the I-CIP averaged 262.18 US cents per lb, down from 287.34 in July 2026.5,6 The groups differ widely, as the chart shows.
Data table
| US cents per lb | Source | |
|---|---|---|
| Colombian Milds | 356.15 | 5 |
| Other Milds | 329.44 | 5 |
| Brazilian Naturals | 290.19 | 5 |
| ICO composite (I-CIP) | 262.18 | 5 |
| Robustas | 167.49 | 5 |
These are averages of past prices. Coffearium does not forecast prices.
Who earns what#
Green coffee is a small part of what consumers pay for coffee. In 2022 an ICO overview put green coffee exports at about USD 20 billion a year. That is at most 10% of the over USD 200 billion generated at retail level.18 A 2025 review reports that producing countries once kept about 30% of the total value and now keep less than 10%.19 Studies differ on the exact share, depending on the chain they measure (see Contested).19,20
Producers usually have to accept the market price, even when it does not cover their costs.4 Their income in local money also depends on the exchange rate, because coffee is priced in US dollars.4,15
Reference values: the exchange contracts#
| Parameter | ICE Coffee “C” (arabica) | ICE Robusta |
|---|---|---|
| Exchange | ICE Futures U.S.1 | ICE Futures Europe2 |
| Lot size | 37,500 lb (≈17.0 t)1 | 10 t2 |
| Price quotation | US cents and hundredths of a cent per lb1 | USD per tonne2 |
| Minimum price step | 5/100 cent per lb = USD 18.75 per lot1 | USD 1 per tonne = USD 10 per lot2 |
| Contract months | March, May, July, September, December1 | January, March, May, July, September, November2 |
| Basis quality | Arabica from the listed growths; better coffees at a premium, inferior at a discount1 | Class 1 robusta at contract price; other qualities at set premiums and discounts2 |
| Origins | Listed growths at par, premium or discount (see below)1 | Any origin freely available for export2 |
Specifications as published by ICE in August and October 2026; the exchange rules prevail. The tonne equivalent of a “C” lot is our arithmetic.22
Exchange differentials and physical differentials#
Two kinds of differential should be kept apart. The first is fixed by the exchange: it sets what a delivered coffee is worth against the contract. In the “C” contract, Mexico, El Salvador, Nicaragua, Papua New Guinea, Panama, Tanzania, Uganda, Honduras and Peru are deliverable at par; Colombia, Costa Rica and Kenya at a 1,000-point premium; Guatemala at a 500-point premium; Burundi, Rwanda, Venezuela and India at a 100-point discount; the Dominican Republic and Ecuador at a 400-point discount; and Brazil at a 600-point discount.1 Prices are quoted in cents and hundredths of a cent per lb, and a point is one hundredth, so 1,000 points equal 10 cents.1 From the May 2027 expiry, Vietnam becomes deliverable at a 600-point discount.1 Delivery ports also carry differentials: New Orleans, Miami and Houston 0.50 cents per lb under New York, and Bremen/Hamburg, Antwerp and Barcelona 1.25 cents under.1
The second kind is the physical differential that buyers and sellers negotiate for a real lot. It is the relationship between the cash price and the futures price, also called the basis.3 It is not published as a price reference and contains a blend of quality, origin and supply and demand in the domestic market.4 According to the same textbook, most of the time it is a buyer’s market, with a few large buyers dominating the trade.4
Fixing a PTBF contract#
In the textbook’s worked example, a roaster agrees with a Brazilian cooperative on quantity, quality and shipment month, while the contract price stays open except for the differential.3 Both sides hedge on the “C” market. When the coffee ships, the roaster’s long futures position is passed to the cooperative as an exchange of futures for physicals (EFP). This closes both hedges and fixes the physical price at the futures level of that day plus the differential.3 Hedgers in coffee include growers, exporters, importers and roasters; according to the textbook, growers and importers tend to hedge by selling futures, roasters by buying them.3
The textbook warns of the risk for cooperatives: if a fixed price is later overtaken by a rising market, members may sell to other buyers and the cooperative can default.4 Mechanics of margins, spreads and options are in Coffee futures.
Currency#
Coffee futures are priced in US dollars1,2, so a producer’s price in local currency is the dollar price times the exchange rate. Coffee prices are volatile partly because exchange rates and futures prices fluctuate.4 A 2009 study of the Brazilian domestic coffee price during the 2002–2003 crisis found that the international price had more influence than the exchange rate: the international price dominated in 24 months, the exchange rate in 8 and domestic factors in 3.15 According to a 2021 panel analysis by the Economic Commission for Latin America and the Caribbean (ECLAC), the Brazilian real–US dollar real exchange rate is among the drivers of arabica prices in Latin America, with green coffee stocks, the oil price and the Colombian peso exchange rate also significant.14 Neither source gives a size of effect that can be applied to a single contract; we give none.
Duties and levies, as of October 2026#
| Parameter | European Union | Switzerland |
|---|---|---|
| Green coffee, not decaffeinated (HS 0901 11) | 0% (no tariff)7,8 | Specific duty by weight, rate in the TARES tariff (not opened for this entry)13 |
| Roasted coffee, not decaffeinated (HS 0901 21) | 7.5%7,9 | Not opened for this entry |
| Roasted coffee, decaffeinated | 9%7,9 | Not opened for this entry |
| Other levy on green coffee | – | Guarantee fund contribution CHF 0.12 per kg since 1 January 2024 (was CHF 0.051)10 |
| Why the levy exists | – | Compulsory stocks: the Federal Council keeps coffee stocks at three months of demand11 |
EU rates are the standard third-country rates; preferential agreements can lower them for some origins.7 Switzerland abolished its industrial tariffs on 1 January 2024, but agricultural products of HS chapters 1–24 – coffee is chapter 9 – were excluded.12 Swiss duties are specific, levied mainly by weight or by piece, not as a percentage of value.13 In the cost calculator, enter a Swiss levy as “other import costs” per kg, not as a duty percentage.
Specialty prices outside the futures logic#
Not every lot is priced against the exchange. Second- and third-wave roasters often buy FOB from exporters or cooperatives, and some buy directly from producers, organising freight and insurance themselves; the third wave often calls this direct trade.3
The Specialty Coffee Transaction Guide collects such prices. Support organisations, exporters, importers and roasters give it detailed contract data on a confidential basis, and it summarises FOB prices, which most export contracts report consistently.17 Following the Specialty Coffee Association (SCA), it counts a coffee as specialty from a score of 80 points.17 In its first data brief, on harvest years from October 2016 to September 2019, combined Fairtrade and organic (FTO) certification kept the lowest prices from falling, while the highest prices went to non-certified coffees.17
Fairtrade sets a price floor. From 1 December 2026 its minimum price for washed arabica is USD 2.00 per lb FOB, with a Premium of USD 0.20 per lb paid on top of the minimum or the market price, whichever is higher.16 Details are in Certifications and labels.
Who earns what: the value chain#
| Measure | Value | Basis | Source |
|---|---|---|---|
| Green coffee exports | ≈USD 20 billion a year, ≤10% of >USD 200 billion retail-level revenue | ICO overview, 2022; revenue figure without stated source | 18 |
| Producing countries’ share of the export value of all forms of coffee | 80.1% (1991) → 59.4% (2018) | ICO statistics, current values | 18 |
| Share of total value kept in origin countries | ≈30% → <10% | Review, citing the Coffee Barometer 2018 | 19 |
| Share reaching primary producers | 5–7% of total value | Review, citing earlier research | 19 |
| Producing countries’ share of value (France) | 24% (mid-1990s) → 16% (2017) | Value-chain study for fair-trade organisations | 20 |
The numbers measure different things: export value, total retail value, or the value of one consuming country’s chain. They agree on the direction – most of the value is added after export – but not on the size.18,19,20 Where value is added after export, it is mainly in importing, roasting and retail.19 No source opened for this entry measured the farmgate share of the retail price for a named origin in 2025 or 2026.
Reference values: price levels, September 2026#
| Indicator | Monthly average (US cents per lb) | ≈USD per kg | Source |
|---|---|---|---|
| ICO composite indicator (I-CIP) | 262.18 | 5.78 | 5 |
| Colombian Milds | 356.15 | 7.85 | 5 |
| Other Milds | 329.44 | 7.26 | 5 |
| Brazilian Naturals | 290.19 | 6.40 | 5 |
| Robustas | 167.49 | 3.69 | 5 |
USD per kg is our conversion.22 During September 2026 the daily I-CIP ranged from 248.44 to 279.85 cents.5 The ICO weights the groups by their share of the market, with weightings published for each coffee year.5 Indicator prices are reference prices for groups of coffee, not the price of any one lot.
Open questions#
- Differential risk. Futures hedges cover the reference price; no exchange instrument covers the physical differential, and no source opened for this entry measured how much of producers’ price risk sits in it.
- Size of currency effects. The direction is established for Brazil, but the studies opened here do not give an effect size usable for a single contract.14,15
- Value shares. Recent, origin-specific measurements of the farmgate share of retail prices are scarce; the commonly quoted shares rest on studies from 2017–2018.19,20
Key studies#
Ferreira et al., 2009 – Sale option contracts in the coffee crisis. The authors broke the Brazilian domestic coffee price of 2002–2003 into the effects of the international price, the exchange rate and domestic factors. The international price dominated in most months, the exchange rate in fewer; government option contracts raised the domestic price in 2002 but not in 2003.
Aliaga Lordemann et al., 2021 – Drivers of arabica prices in Latin America. A panel of ICO group prices, Colombian grower prices and farmgate prices was analysed with time-series and panel methods. The Brazilian real exchange rate, inflation and January rain raised prices; stocks, the oil price and the Colombian peso rate lowered them.
Specialty Coffee Transaction Guide, 2020 – Certification and FOB prices. A university team pooled confidential specialty contracts from three harvest years. Certified coffees kept a higher price floor, while the highest prices were paid for non-certified lots.
Fantini et al., 2025 – Fairness in coffee value chains. A study of how small producers organise to gain fairer terms. Its introduction summarises earlier estimates that producing countries keep less than a tenth of the value of coffee.
- Share of coffee value kept in producing countries: a 2025 review reports that origin countries once kept about 30% of the total value and now keep less than 10%19; a value-chain study by a French research group gives 24% in the mid-1990s and 16% in 2017 of the value of coffee consumed at home in France20. The studies measure different chains and value bases, so the numbers are not directly comparable.
- Decaffeinated green coffee entering the EU: an export-promotion guide of the Dutch government (2025) says no tariff applies to it7; an ICO table of 2010 lists 8.3% for it9, and an unofficial copy of the TARIC, updated 10 October 2026, also lists an 8.3% third-country duty.23 The official TARIC line was not opened for this entry.
Coffearium (2026). How a coffee price is made. Coffearium – The open coffee compendium. Retrieved 22 October 2026, from https://coffearium.org/entries/how-a-coffee-price-is-made/
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author = {{Coffearium}},
title = {{How a coffee price is made}},
year = {2026},
howpublished = {Coffearium -- The open coffee compendium},
url = {https://coffearium.org/entries/how-a-coffee-price-is-made/},
urldate = {2026-10-22},
note = {Retrieved 22 October 2026}
}Entries are updated when the evidence changes; the retrieval date tells your readers which version you used.
Sources
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- A(2010). Obstacles to consumption (ICC 105-7). International Coffee Organization, International Coffee Council 105th session.
- A/BAdaptation guarantee fund contribution Coffee. réservesuisse genossenschaft, Bern.
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- A(2024). Zollbericht Schweiz: Zölle und Einfuhrabgaben. Germany Trade & Invest (GTAI).
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- AFerreira, M. D. P.; Sousa, L. O.; Teixeira, E. C.; Campos, A. C. (2009). O papel dos contratos de opção de venda na crise cafeeira em 2002 e 2003 (The role of sale option contracts in the coffee crisis of 2002 and 2003). Revista de Política Agrícola 18(3).
- A/BFairtrade International, Standards and Pricing (2026). Price announcement for Fairtrade Coffee (30 July 2026). Fairtrade International, Bonn.
- BSpecialty Coffee Transaction Guide research team (2020). The Effects of FTO Certification on FOB Prices for Specialty Coffees (SCTG Data Brief 1). Specialty Coffee Transaction Guide, Emory University (Goizueta Business School).
- A/BPatacconi, G. (2022). ICO Report – Coffee Market Overview (13th Multi-year Expert Meeting on Commodities and Development). International Coffee Organization, presented at UNCTAD, Geneva, 10–12 October 2022.
- AFantini, A.; Samoggia, A.; Bonfigli, L.; Quiñones-Ruiz, X. F. (2025). Fairness in coffee value chains: organizational solutions for the self-governance of small producers. Frontiers in Sustainable Food Systems 9, 1661027. doi:10.3389/fsufs.2025.1661027 · other copies
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- AMünchow, M.; Alstrup, J.; Steen, I.; Giacalone, D. (2020). Roasting Conditions and Coffee Flavor: A Multi-Study Empirical Investigation. Beverages 6(2), 29. doi:10.3390/beverages6020029 · other copies
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Tier A · authoritative · B · trade and expert · C · general. Supporting quotes for every source are in the data version of this entry. If a publisher’s site refuses access, try the doi link or “other copies”.
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