How a New Middle East Conflict Could Affect Coffee Prices in the Philippines
Global conflicts may feel distant — but for coffee roasters, they rarely are.
With escalating tensions affecting the Strait of Hormuz, global energy markets are reacting immediately. While coffee is not produced in the Middle East, the region plays a critical role in global oil supply — and oil powers the international coffee supply chain.
For Philippine coffee importers, café operators, and consumers, understanding this connection is essential.
Why the Strait of Hormuz Matters to Coffee
The Strait of Hormuz is one of the most strategically important maritime chokepoints in the world. Roughly 20% of global oil supply typically passes through this narrow corridor connecting the Persian Gulf to international markets.
If maritime traffic is disrupted:
- Oil prices can spike rapidly
- Shipping insurance premiums increase
- Freight costs rise
- Global logistics slow down
Coffee is not shipped directly through Hormuz in most cases. However, global fuel pricing heavily influences coffee at every stage of its journey.
1. Oil Prices Rise First — Coffee Feels It Next
When geopolitical risk in the Middle East increases, oil benchmarks such as Brent crude typically react within hours.
Higher oil prices affect coffee through multiple cost channels:
- Ocean freight for imported green beans
- Local trucking and warehouse distribution
- LPG or natural gas used in roasting
- Electricity costs for cafés and roasting facilities
Coffee moves multiple times before it reaches your cup. Every stage depends on fuel.
When Philippine roasters import beans from Brazil, Colombia, Ethiopia, or Vietnam, sustained oil price increases can gradually compress profit margins.
2. Freight and Shipping Risk Premiums Increase
Even if coffee shipments originate from Latin America or Southeast Asia, global shipping markets are interconnected.
When tankers and cargo vessels avoid high-risk zones:
- Available shipping capacity tightens
- Insurance premiums rise
- Transit routes may lengthen
- Spot freight rates increase
For Philippine coffee importers, this can raise landed cost per kilo and extend delivery timelines.
Longer transit times also mean:
- More working capital tied up in inventory
- Increased forecasting pressure
- Greater exposure to foreign exchange volatility
3. A Stronger US Dollar Increases Import Costs
Coffee is traded globally in US dollars.
During geopolitical uncertainty, the US dollar often strengthens as investors seek safe-haven assets.
If the Philippine peso weakens:
- Green coffee contracts become more expensive
- Import invoices increase immediately
- Retail price pressure builds over time
Even a 3–5% foreign exchange movement can meaningfully increase cost per kilo before roasting begins. For smaller specialty roasters without formal currency hedging, this impact can be immediate.
4. Coffee Futures Markets React to Uncertainty
Geopolitical instability also affects commodity markets.
Arabica and Robusta futures can become more volatile in the short term as traders react to rising energy costs, shipping risks, and macroeconomic uncertainty.
Even if farm production remains stable, coffee prices may fluctuate due to market sentiment. This can influence importer contracts and wholesale pricing structures.
What Filipino Coffee Drinkers Can Expect (Next 3–6 Months)
There are three realistic scenarios:
Short-Term Tension
Oil stabilizes quickly. Freight markets normalize. Minimal retail impact.
Prolonged Energy Shock
Sustained higher fuel prices and a stronger US dollar. Retail coffee prices may adjust upward by 3–8%.
Escalated Global Disruption
Higher freight premiums, tighter shipping capacity, and potential inventory constraints for smaller roasters.
Historically, coffee demand remains resilient. However, during inflationary periods, consumers may shift toward blends or more value-driven options.
Is This a Coffee Supply Crisis?
At this stage, it is not a farm-level supply issue.
Coffee-producing countries such as Brazil, Colombia, Ethiopia, and Vietnam remain operational.
The primary risk transmission comes from energy, logistics, and currency — not agricultural production.
Final Perspective: Coffee Is Local in Experience, Global in Structure
A disruption in the Strait of Hormuz does not change how coffee tastes — but it can influence how coffee is transported, priced, and managed.
For Philippine coffee drinkers and specialty roasters, awareness allows for better expectations and informed purchasing decisions.
Coffee is brewed locally — but its pricing and supply are shaped by global forces.
A Note From Everyday Coffee Roasters
At Everyday Coffee Roasters, we plan around volatility rather than react to it. That means disciplined buying, practical inventory buffers, and a careful approach to pricing — adjusting only when the underlying costs are real and sustained.
Our goal is simple: keep quality consistent, keep supply dependable, and keep customers informed. In a market shaped by global forces, transparency and operational discipline matter as much as great roasting.