Opinion Food & Drink Rising prices open door for Saudi Arabia to lead coffee market With its favourable topography and climate, the Arabian Peninsula has the potential to be a major producer By Martin Keulertz February 16, 2025, 6:45 PM Khaled Abdullah/Reuters A farmer harvests coffee beans in Haraz, Yemen. The Arabian Peninsula has a rich history of coffee production The months ahead look pricey for coffee lovers. For the fourth consecutive year, global coffee consumption in 2024 exceeded supply, depleting reserves and driving up costs in international markets. In February, green coffee reached an all-time high of $4.38 per pound (0.45kg). Further price increases to $5.50, perhaps even $10, are not out of the question. The global decline in coffee production stems from multiple factors. Climate change has devastated harvests in Brazil and Vietnam, which account for more than 50 percent of global coffee exports. Meanwhile, decades of deforestation, monocropping and excessive use of fertilisers and pesticides have stripped soils of resilience, leaving them unable to withstand prolonged droughts or intense rainfall. Most importantly, the price of raw coffee has been squeezed down since the 1970s, leading to inadequate wages for coffee pickers, who are now increasingly scarce. Coffee farming has also failed to generate sustainable returns for farmers. Ongoing supply chain disruptions since Covid 19, a threat of new tariffs, and mounting pressure on low-margin producers have further strained the industry. Saudi Arabia currently produces similar coffee outputs to Taiwan, with about 800 tonnes per year At the same time, millions of speciality cafeteria owners have based their livelihoods around cheap coffee. A growing number of middle-class home baristas around the world have invested in expensive domestic appliances previously only seen in Italian city centre bars. For Mena consumers, rising coffee prices are unwelcome news. The region has a strong coffee culture, with Lebanon ranking among the world’s top 10 coffee-consuming countries. Algeria, Qatar, Kuwait, Bahrain, the UAE and Saudi Arabia also rank in the top 30 globally. The Mena coffee market is projected to reach $11.5 billion in sales by the year-end, driven in large part by an expanding specialty coffee sector, which includes espresso, cortados, lattes and Americanos. A rich coffee tradition Although coffee was first produced in the highlands of East Africa, it was traded in the southern part of the Arabian Peninsula in today’s Yemen. Hence, it has a strong heritage in the Middle East. It is not surprising that Saudi Arabia seeks to establish a coffee city in Al Baha as part of Vision 2030 to grow more beans and celebrate coffee culture on the Arabian Peninsula. With favourable topography and climate, the Arabian Peninsula has the potential to be a major coffee producer. The southern Saudi Arabian highlands, for instance, provide ideal conditions for growing Coffea Arabica, which thrives at altitudes between 1,300 and 1,400 metres above sea level. However, cultivation is highly water-intensive, posing a significant challenge in this arid region. Arabica coffee ideally receives 1,500-1,800mm of rainfall per year. In Saudi Arabia’s Al Baha, precipitation levels are about 650mm per year. The remaining water will have to be irrigated using fossil groundwater, costly pumped recycled water from cities such as Jeddah, or even more expensive desalinated water from the Red Sea. Currently, Saudi Arabia produces about 800 tonnes of coffee grown on 400,000 Arabica coffee trees. This output is due to expand to 1.2 million trees by 2026 – roughly a tripling of production. In comparison, Saudi Arabia currently produces similar coffee outputs to Taiwan, with about 800 tonnes per year. If plans go ahead, the kingdom will reach production levels comparable to the US. Yet, both Saudi Arabia and the US are minor producers compared to Brazil, which produces 31 million tonnes, and Vietnam, which produces nearly 20 million tonnes. Producing ‘black gold’ The US state of Hawaii markets its coffee as a high-end delicacy, selling it for approximately $150 per kilogram. Saudi Arabia can pursue a similar strategy, marketing its crop as a luxury product to consumers in the Gulf. This sends out the right message. Coffee must regain its status as “black gold” to be sustainably produced. If coffee is too cheap, farmers simply cannot pay decent wages and act as environmental stewards. Saudi Arabia has the potential to lead the world in coffee production using regenerative farming methods, which prioritise soil health through crop rotation, cover crops and zero tillage to prevent topsoil disturbance. Middle Eastern coffee market expected to hit $11bn Bids open for Saudi ‘coffee city’ in production drive $16m pumped into coffee farms as Riyadh chases lofty target Regenerative agriculture is increasingly recognised as a sustainable model for coffee cultivation, as it reduces the need for fertilisers – especially when nitrogen-fixing crops such as soybeans are rotated with nitrogen-hungry crops like corn. However, this approach requires skilled, fairly-compensated farmers to harvest the crop, raising prices. Yet, this may be a necessary adaptation to climate change. Saudi Arabia’s Coffee City can also serve as an educational hub, helping consumers understand the challenges of farming and fostering a deeper connection between people, food production and nature. In this way, Al Baha can become a global model for climate-conscious agricultural education. Martin Keulertz is a lecturer in environmental management at the University of the West of England, Bristol.
