Wake up and smell the climate crisis: coffee prices set to increase in 2025

Wake up and smell the climate crisis: coffee prices set to increase in 2025
Cupping different coffees varieties with WCR member company, Counter Culture, as a part of the International Multilocation Variety Trial. (Counter Culture Coffee)
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Updated 21 December 2024
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Wake up and smell the climate crisis: coffee prices set to increase in 2025

Wake up and smell the climate crisis: coffee prices set to increase in 2025
  • Price rises come as the global coffee industry battled a perfect storm of challenges, with climate change, supply chain disruptions, and global market forces all having an impactThe price rises came as the global coffee industry battled a perfect stor

RIYADH: It is the caffeine, not the cost, of a morning coffee that is supposed to help you shake off any lingering sleepiness, but the world’s wake-up drink of choice is set to get more expensive in 2025.

December saw the cost of Arabica beans hit a record high on the global commodities market, while Robusta prices nearly doubled in 2024, reaching $5,694 a tonne by late November.

The price rises came as the global coffee industry battled a perfect storm of challenges, with climate change, supply chain disruptions, and global market forces all having an impact.

It is against this backdrop that Saudi Arabia is looking to expand its involvement in the sector, with the Middle East consuming more than its fair share of the product.

The International Coffee Organization estimated that 6.3 million 60-kg bags of coffee were drunk in the Middle East in the year 2022/23 – 3.6 percent of the world’s consumption.

“The region’s population is 196 million, or 2.6 percent of the world’s population. The region is consuming above its share,” the organization noted.

Dock No, statistical coordinator with the Secretariat of the ICO, highlighted that Saudi Arabia became the second country in the Middle East to become a member of the International Coffee Organization, when the country signed the International Coffee Agreement in February.

“The coffee sector in Saudi Arabia is growing fast and is an important part of our plans for the future and the change we wish to bring to our country as it contributes to diversifying the national economy,” No said.

The coffee organization highlighted the Saudi Coffee Co., a new venture launched by the Kingdom’s Public Investment Fund. With a $319 million investment over 10 years, the company aims to significantly expand Saudi Arabia’s coffee production from 300 tonnes annually to 2,500 tonnes.

This growth will be driven by a focus on sustainability throughout the coffee supply chain, from production to distribution and marketing.

“Varieties are a key tool for any agricultural system, and improved varieties will contribute to productive climate resilient coffee systems in Saudi Arabia, just like anywhere else,” CEO of World Coffee Research, Jennifer Vern Long emphasized in an interview with Arab News.

A global challenge

Andrew Hetzel, a coffee and high-value agriculture specialist, told Arab News that climate change, particularly prolonged droughts and unpredictable weather patterns, is directly affecting bean crops.

Brazil, which primarily produces arabica, and Vietnam, which is the largest robusta producer, are experiencing unseasonably dry weather, leading to lower yields and quality for the 2024/25 season.

The South American country is also the second-largest robusta producer, and has faced crop yield losses due to unusually dry weather in key growing regions. No also noted the country’s vulnerability to past extreme events like the frost of July 2021 that affected its crop​.

Hetzel said: “Brazil is the most sophisticated agribusiness producer of coffee as a nation, but even they do not irrigate all of their fields.”

Long emphasized the urgency of increasing coffee productivity globally to meet growing demand.

She said: “Improving productivity doesn’t just ensure the supply of coffee can keep up with demand, it also decreases carbon emissions from coffee farming.”

Long further explained that current investments in coffee agricultural R&D, which stand at only $115 million per year, are far too low for a sector with such global significance.




Vern Long at the WCR Research Farm, Flor Amarilla, standing next to a promising new coffee variety. (World Coffee Research)

This surge in robusta prices is driven by a mix of climate-related challenges, geopolitical issues, and tightening supply chains.

In Vietnam production is expected to fall by 10 percent for the 2023/24 season, and the ICO’s No told Arab News that Vietnam’s local markets have reported domestic stocks running low.

Adding to these pressures is the disruption of key global trade routes. The Red Sea crisis has heavily impacted shipping, particularly for exports from Vietnam and Indonesia to Europe.

Roasters are now grappling with longer shipping times and higher costs due to rising insurance premiums and intense competition for container space.

As a result, robusta inventories are plummeting. By January 2024, certified robusta stocks had dropped to 0.48 million 60-kg bags, a sharp 15.4 percent decline on the previous month, according to a report by the ICO.

The ICO’s coordinator explained that coffee stocks in Europe have fallen by almost half since 2021, reducing from 15.5 million 60-kg bags to 8.7 million​.

Hetzel said some coffee prices are still being impacted from the COVID-19 pandemic, pointing to its effects on transport costs. “The cost of ocean freight from Indonesia to North America quadrupled as exporters fought for empty containers and ship bookings. Container shortages persist today,” he said.

No added that shipping disruptions through the Suez and Panama canals in the past 12 months have only exacerbated these logistical issues, forcing coffee exporters to take longer routes, which added to the cost.

Though green coffee bean exports saw a 12.6 percent increase in December 2023 compared to the previous year, this short-term boost is unlikely to ease the growing strain on supply.

Innovation needed to address coffee’s sustainability crisis

A recent report by World Coffee Research set out how the sector faces an innovation crisis that requires urgent attention, particularly in the wake of climate change.

The organization’s CEO explained that a significant increase in global investment — around $452 million per year — is required over the next decade to meet rising demand while mitigating climate-related yield losses.

The report emphasized that climate change is reducing coffee origin diversity and endangering smallholder production. This, combined with rising demand, could further destabilize the industry if not addressed.

Hetzel also underscored the vulnerability of smallholder farmers, particularly in developing regions. “The vast majority of coffee production is in fragile states that are highly susceptible to climate change,” he said, adding that many smallholder farmers are likely to be severely impacted by economic losses, leading to food insecurity, conflict, and out-migration.

How climate change will continue to drive up prices

Compounding these issues is the broader impact of climate change. The recent declaration of an El Nino weather event by the US Climate Prediction Center is expected to bring more drought to Vietnam and excessive rains to Brazil, further threatening coffee production.

Meanwhile, the war in Ukraine has driven up fertilizer prices and energy costs, adding to the financial burden on coffee growers and roasters alike. As Hetzel noted: “The war in Ukraine has increased energy costs downstream from the farm – transportation, roasting, and distribution costs have all risen.”

No also highlighted the broader effects of inflation and rising input costs on coffee producers, particularly those in the Americas dealing with seasonal labor shortages​.

According to the WCR report, increased global investment is essential to ensure the long-term viability of coffee producers. Long warned that without action, the industry will continue to experience supply constraints and rising prices.

For the global coffee industry, navigating this turbulent environment requires vigilance and greater investment in innovation. As supply constraints and climate events continue to unfold, traders, roasters, and consumers alike are bracing for what could be a prolonged period of high coffee prices.


Saudi wealth fund’s SURJ Sports Investment acquires minority stake in DAZN

Saudi wealth fund’s SURJ Sports Investment acquires minority stake in DAZN
Updated 17 February 2025
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Saudi wealth fund’s SURJ Sports Investment acquires minority stake in DAZN

Saudi wealth fund’s SURJ Sports Investment acquires minority stake in DAZN

RIYADH: SURJ Sports Investment, the sports arm of the Public Investment Fund, has acquired a minority stake in DAZN to broaden broadcasting opportunities and enhance access to both live and on-demand sports content.

This strategic investment aims to support the growth of Saudi Arabia’s sports sector while bolstering DAZN’s presence in the Middle East and other key markets, according to an official statement released on Monday.

As part of the deal, SURJ and DAZN will launch DAZN MENA, a joint venture designed to elevate sports broadcasting capabilities across Saudi Arabia and surrounding markets.

“This investment is in line with SURJ’s mission to drive fan engagement, boost sports participation, and unlock transformative opportunities, all while positioning the region as a hub for world-class sports,” said Danny Townsend, CEO of SURJ Sports Investment.

The collaboration is set to accelerate the growth of the broader sports sector by enhancing fan engagement and supporting initiatives that encourage sports participation.

“As part of the DAZN MENA joint venture with SURJ, DAZN is committed to expanding sports access and delivering an unparalleled entertainment experience to a global community of passionate fans,” added Shay Segev, CEO of DAZN.

Earlier in January, SURJ entered into a strategic partnership with US-based Enfield Investment Partners. This collaboration is focused on co-investing in global sports properties, including teams, leagues, media rights, and infrastructure. Enfield launched a $4 billion global sports asset fund and will establish a presence in SURJ’s Riyadh offices to support mutual growth and objectives.

Founded in 2023, SURJ Sports Investment is dedicated to international sports investments and advancing Saudi Arabia’s sports ecosystem. Its strategy encompasses investments in broadcasting, digital platforms, grassroots initiatives, and fan engagement.

Through this partnership, DAZN will serve as a key streaming and broadcasting partner for Saudi sports, significantly expanding their reach to a global audience. Operating in over 200 markets, DAZN has built a platform that integrates live sports streaming with interactive digital experiences.

The agreement with SURJ is expected to usher in new broadcasting technologies and further expand the accessibility of sports media in the region.


Saudi Arabia unveils $7.7bn mining investments in Wa’ad Al-Shamal

Saudi Arabia unveils $7.7bn mining investments in Wa’ad Al-Shamal
Updated 17 February 2025
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Saudi Arabia unveils $7.7bn mining investments in Wa’ad Al-Shamal

Saudi Arabia unveils $7.7bn mining investments in Wa’ad Al-Shamal

RIYADH: Saudi Arabia’s mining sector is poised for a major boost with nearly SR29 billion ($7.7 billion) in investments being directed toward the city of Wa’ad Al-Shamal.

Prince Faisal bin Abdulaziz, governor of the Northern Borders region, inaugurated a series of industrial, developmental, and hospitality projects aimed at solidifying the city’s role as a major hub for the Kingdom’s mining industry.

A major highlight of the announcement was the launch of Ma’aden’s Phosphate 3 project, backed by the Shareek program and an investment of SR28 billion.

This initiative is set to increase Saudi Arabia’s phosphate production capacity to 9 million tonnes annually, building upon the existing Phosphate 1 and Phosphate 2 projects, each producing 3 million tonnes. This expansion is expected to bolster the country’s industrial supply chain, generate new investment opportunities, and create employment within the sector.

The governor emphasized that these projects align with Saudi Vision 2030, which aims to expand the mining sector’s contribution to the national economy.

He highlighted that Wa’ad Al-Shamal has transformed into a model for integrated industrial cities, combining major industries, logistics services, and modern residential communities, which enhance its appeal to both local and international investors.

The event was attended by Minister of Industry and Mineral Resources Bandar Alkhorayef, Deputy Minister for Mining Affairs Khalid Al-Mudaifer, and other key officials from both the public and private sectors.

Additionally, the Saudi Authority for Industrial Cities and Technology Zones launched several new industrial, logistical, and service projects, with investments exceeding SR550 million. These projects include infrastructure development in the industrial zone, which spans 4.3 million sq. meters. As part of this initiative, 32 ready-built units have been established, consisting of 20 pre-built factories and 12 support units covering a combined area of 45,000 sq. meters.

Further key developments include a 132 kilovolt, 200 megavolt-amperes power substation, overhead transmission lines, and a 7-km bridge connecting the industrial zone to the international highway. These projects aim to improve logistics and energy reliability, creating an attractive environment for investments, particularly in the phosphate industry.

In addition, the governor inaugurated the expansion of Ma’aden’s residential city in Wa’ad Al-Shamal, adding 96 new residential units. This brings the total number of housing units to 579, supporting industrial and mining sector employees and their families.

To complement the region's infrastructure improvements, the Movenpick Wa’ad Al-Shamal Hotel, developed with an investment exceeding SR500 million, was officially opened. The five-star hotel is designed to cater to the growing accommodation demand from workers, investors, and visitors to the industrial city and Northern Borders region, further enhancing Wa’ad Al-Shamal’s position as an integrated industrial and investment hub.

As part of broader efforts to advance the mining sector, Alkhorayef, along with the deputy minister for mining affairs and other officials, visited several industrial and developmental projects in Wa’ad Al-Shamal and the Northern Borders region.

The tour included a visit to the Scientific Excellence School in Arar, where the minister reviewed modern training laboratories and met with students and faculty. Established through a partnership between Ma’aden and the Ministry of Education with an investment of approximately SR180 million, the initiative seeks to promote scientific education and develop expertise in STEM fields.

The minister also toured the Saudi Technical Institute for Mining in Arar, which has trained over 1,081 students, including 52 female graduates, in a range of specializations such as underground and surface mining, mining operations, and mechanical and electrical maintenance. Equipped with advanced mining simulation and training facilities, the institute plays a pivotal role in workforce localization and preparing Saudi talent for the mining industry.

The tour also included a visit to the Hazm Al-Jalamid mine, one of the Kingdom’s key phosphate mining sites, producing more than 11 million tonnes of phosphate ore annually.

The Northern Borders region is home to extensive mineral resources valued at approximately SR4.669 trillion.

It is a major source of phosphate, a critical element in global food security due to its role in agricultural fertilizer production. The region also contains high-quality deposits of coal, dolomite, limestone, and silica sand. It currently holds five phosphate ore reserve sites and 29 active mining licenses, including 15 for building materials and 14 for mineral extraction.


Big 5 Construct forum fuels Saudi Arabia’s $1.7tn projects’ pipeline 

Big 5 Construct forum fuels Saudi Arabia’s $1.7tn projects’ pipeline 
Updated 17 February 2025
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Big 5 Construct forum fuels Saudi Arabia’s $1.7tn projects’ pipeline 

Big 5 Construct forum fuels Saudi Arabia’s $1.7tn projects’ pipeline 
  • Two-week event showcases industry-leading discussions, strategic deals and innovative technologies, showcases key innovations
  • Masdar signs partnership with Public Investment Fund; PIF acquires a 30% stake in Masdar

RIYADH: Big 5 Construct Saudi 2025 returned for its 13th edition in a groundbreaking two-week format, running from Feb. 15— 18 and 24— 27 at the Roshn Front in Riyadh.

The expansion aligns with the Kingdom’s construction boom, driven by Vision 2030 and a $1.7 trillion pipeline of mega and giga-projects. 

The event was inaugurated by Mohammed Abdulaziz Al-Ajlan, chairman of the Saudi Contractors Authority, with the new two-week format designed to meet the increasing market demand and sector-specific growth opportunities within the Kingdom’s construction industry.

In its first week, Big 5 Construct Saudi hosted the 5th edition of the International Contracting Conference, organized by the SCA and dmg events, bringing together senior government officials, industry leaders and experts to discuss the future of construction in the Kingdom

In his keynote speech at the ICC, Al-Ajlan said the event “serves as an important platform for thought leadership and strategic discussions” that will shape the future of the construction industry as Saudi Arabia accelerates toward its Vision 2030 goals. 

He added: “As a testament to the Kingdom’s leadership in construction excellence, Big 5 Construct Saudi complements our mission at the SCA to empower stakeholders, drive sustainability, and champion advancements that will propel the sector to new heights.”

Industry leaders participated in discussions on advancing sustainability and environmental, social and governance goals in Saudi Arabia. Sinan Rasheed, director of sustainability at New Murabba, highlighted the critical role of transparency and accountability through robust ESG reporting and compliance frameworks.

In its first week, the forum welcomed professionals from across the industry to explore innovations in the foundational stages of construction, spanning structural development, materials and engineering solutions, with co-located events including Heavy Saudi Arabia, Totally Concrete Saudi Arabia, and HVAC R Saudi Arabia.

“As we opened the doors to this year’s Big 5 Construct Saudi, construction industry professionals are gathering to explore key sectors such as heavy construction, concrete, HVAC, MEP technologies and building materials in the first week of the event, ” said Matt Denton, president at dmg events.

“The expanded two-week format not only enhances the attendee experience but also ensures that professionals can find the tools and technologies they need, representing every segment of the construction value chain. The first week specifically focuses on products and solutions for projects in the foundation to ground-up stages, aligning perfectly with the Kingdom’s growing construction demands,” he added.

On the sidelines of Big 5 Construct Saudi, Masdar signed a partnership with the Public Investment Fund, not long after PIF acquired a 30 percent stake in the building and construction materials company by subscribing to new shares via a capital increase.

According to Masdar, the strategic partnership strengthens the company’s position in the sector and drives growth to contribute to Vision 2030.

Faisal Majid Al-Muhaidib, CEO of Masdar, told Arab News: “We are a leading building material company, active in 29 cities in Saudi Arabia with 105 branches. Last week we announced that PIF has invested 30 percent in Masdar shares. So today they are our partners. This is a very big leap for Masdar.”

Al-Muhaidib said PIF has invested in the company as it seeks to localize the supply chain within Saudi Arabia, enhance the customer experience while shopping for building materials, and accelerate growth within the sector in the Kingdom.

He said: “We strongly believe that today we are living in the golden age of the construction industry in Saudi Arabia. We have wise leadership, a clear vision and a very supportive government. Saudi Arabia has always been a place of stability within the region. We are very much optimistic about the future.”

The CEO said in 2024 the building material sector size was around SR380 billion ($101.32 billion), and it is expected to reach SR500 billion by 2030.

“With works in progress for several mega projects, major sporting events and oil and gas there, we see many sectors open within Saudi Arabia for the building and construction material,” Al-Muhaidib said.

Abdulmajid Al-Rashoudi, governor of the SCA, described the construction sector as standing “at the heart of the Kingdom’s Vision 2030”.

He added: “At the SCA, we are committed to building an ecosystem that drives innovation, strengthens local capabilities, and attracts global expertise. 

“Our ongoing partnership with Big 5 Construct Saudi, the largest construction event in Saudi Arabia, is a testament to this vision. 

“It provides a world-class platform that connects public and private sector leaders and industry experts, showcases cutting-edge solutions, and accelerates knowledge exchange, thus playing a significant role in building a future-ready construction sector.”

Over 2,000 exhibitors from more than 60 countries are expected at Big 5 Construct Saudi across the two weeks, showcasing the latest products, services, systems and solutions.

As part of the EcoTrail feature on the opening day, one of the exhibitors, Dewalt, demonstrated its battery-powered tools that reduce carbon emissions by up to 60 percent.

Another exhibitor, LumiCon by Brickeye, presented real-time Internet of Things-based concrete strength monitoring which eliminates excess material waste and improves efficiency.


UAE, Ukraine sign comprehensive economic partnership deal

UAE, Ukraine sign comprehensive economic partnership deal
Updated 17 February 2025
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UAE, Ukraine sign comprehensive economic partnership deal

UAE, Ukraine sign comprehensive economic partnership deal

JEDDAH: The UAE and Ukraine have signed a Comprehensive Economic Partnership Agreement, removing customs duties on 99 percent of Emirati goods and 97 percent of Ukrainian exports to boost trade and investment. 

The agreement aims to unlock new trade and investment opportunities, fostering deeper economic ties between the countries, reported the Emirates News Agency. 

The signing ceremony was attended by UAE President Sheikh Mohamed bin Zayed Al-Nahyan and Ukrainian President Volodymyr Zelenskyy, marking a major step in enhancing bilateral economic cooperation. 

This follows the UAE’s signing of CEPAs since 2021 with countries like India, Indonesia, Turkiye, Israel, Malaysia, Jordan, and Morocco to boost trade, attract investments, and protect exports and intellectual property. 

The UAE president emphasized the strategic importance of the CEPA, highlighting its role in boosting bilateral trade and advancing both nations' economic ambitions. He expressed confidence that the agreement would strengthen economic relations and contribute to sustainable development. 

Zelenskyy echoed these sentiments, emphasizing that the agreement would benefit both Ukraine and the UAE, expanding economic cooperation and providing new opportunities for growth. 

The CEPA agreement was signed in a formal ceremony at Qasr Al-Shati by UAE Minister of State for Foreign Trade Thani bin Ahmed Al-Zeyoudi and Ukraine’s First Deputy Prime Minister and Minister of Economy Yulia Svyrydenko. 

The deal is projected to contribute $369 million to the UAE’s gross domestic product and $874 million to Ukraine’s by 2031. It is also expected to accelerate Ukraine’s economic recovery and create new opportunities in sectors such as infrastructure, heavy industry, and aviation, as well as aerospace, and information technology, according to WAM. 

The deal was signed after the two countries expressed their intent to negotiate a CEPA in December 2022, following over $3 billion in trade and investment commitments made during Zelenskyy’s visit to the UAE in February 2021.

Bilateral trade between the UAE and Ukraine totaled $372.4 million in 2024, down from $385.8 million in 2023. Joint foreign direct investment reached $360 million by 2022, covering sectors like logistics, infrastructure, tourism, and advanced technology. 

The CEPA aligns with the UAE’s broader strategy to expand its global trade partnerships and increase investment across various sectors. The country aims to grow its non-oil trade to 4 trillion dirhams ($1.1 trillion) by 2031, with international trade playing a central role in its economic vision.


Closing Bell: Saudi benchmark index edges down to close at 12,266

Closing Bell: Saudi benchmark index edges down to close at 12,266
Updated 17 February 2025
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Closing Bell: Saudi benchmark index edges down to close at 12,266

Closing Bell: Saudi benchmark index edges down to close at 12,266

RIYADH: Saudi Arabia’s Tadawul All Share Index edged down on Monday, losing 105.61 points, or 0.85 percent, to close at 12,266.46.    

The total trading turnover of the benchmark index was SR5.4 billion ($1.2 billion), as 41 stocks advanced, while 201 retreated.      

The MSCI Tadawul Index also declined by 15.52 points, or 1.01 percent, to close at 1,521.64.  

The Kingdom’s parallel market, Nomu, lost 92.37 points, or 0.29 percent, to close at 31,644.81. This comes as 30 stocks advanced while 52 retreated.    

Arabian Internet and Communications Services Co. emerged as the best-performing stock, with its share price surging by 4.82 percent to SR355.    

Other top performers included Al Hassan Ghazi Ibrahim Shaker Co., which saw its share price rise by 3.90 percent to SR29.30, and Shatirah House Restaurant Co., which saw a 3.65 percent increase to SR23.26.   

Abdullah Saad Mohammed Abo Moati for Bookstores Co. rose 3.02 percent to SR42.70, while Jamjoom Pharmaceuticals Factory Co. gained 2.74 percent to SR164.80.  

Anaam International Holding Group saw the steepest decline of the day, with its share price easing 5.80 percent to close at SR24.68.  

Al Mawarid Manpower Co. fell 3.45 percent to SR134.20, while Al Majed Oud Co. dropped 3.28 percent to SR171.20.  

Middle East Healthcare Co. also faced a loss in today’s session, with its share price dipping 2.99 percent to SR81.20, while Mutakamela Insurance Co. saw a 2.77 percent to settle at SR17.52.   

On the announcements front, Dar Al Arkan Real Estate Development Co. has fully redeemed its $600 million sukuk from its 2025 Series 6 Medium-Term Note program. 

In a bourse filing, the company confirmed that the sukuk was paid in full on its due date, with the principal amount transferred to the designated account.  

The sukuk, valued at $600 million, was originally issued on Oct. 15, 2019, with a trading end date of Feb. 15. 

Dar Al Arkan utilized its internal resources to meet the obligation, ensuring a smooth redemption process. HSBC Bank served as the transaction’s paying agent and sukuk holders’ agent.  

A total of 3,000 sukuk units, each with a par value of $200,000, were redeemed, representing 100 percent of the issued amount. 

Sukuk holders are scheduled to receive their respective amounts in their accounts on Feb. 17.

The financial impact of the redemption will be reflected in the company’s first-quarter 2025 results. 

Dar Al Arkan acknowledged the role of its investors and sukuk holders in the transaction, emphasizing their continued trust in the company, its board, and its executive management.