Coffee prices will continue to rise until mid-2025 due to a lack of supply from key producing countries, with European consumers paying even more for a cup of coffee as new deforestation regulations come into force, reports Bloomberg.

Estimates of a further decline in production from Vietnam, the top producer of the “robusta” variety, are fueling a rise in prices for the variety widely used for various blends as well as for espresso, Giuseppe Lavazza, president of the Luigi Lavazza SpA.

This year’s poor harvest has resulted in companies such as Lavazza paying up up to $1,000 more from coffee contracts for beans from Vietnam, added the company’s president.

“We’ve never seen anything like it in the history of our industry” Lavazza pointed out. “And what makes it even more special is the long duration of the phenomenon”.

Futures of the variety have seen an increase of about 60% on the year, reaching new highs of $4,667 a ton on Tuesday. Concerns about the next harvest come on top of fears about supply levels after hot and dry weather in Vietnam devastated coffee trees.

Higher coffee bean prices, combined with increased transportation costs due to problems with the Suez Canal and the stronger dollar, have pushed the company’s costs to over 800 million euros in the last two yearsLavazza added.

With the EU’s deforestation directive coming into force by the end of the year “there are many market players who buy coffee beans earlier” Lavazza said, explaining that this way they won’t have to prove if their supply chains are linked to areas deforested after 2020.

“Without a doubt the coffee we will be buying will cost much more.”