Tag: Coffee Exports

Peruvian Coffee Output Stable at 4.78 Million Bags in 2026

Posted on by Qahwa World

Author: Qahwa World – Lima
Source: USDA Foreign Agricultural Service – Report PE2026-0008
Date: May 20, 2026

Peruvian Coffee Output Stable at 4.78 Million Bags in 2026

Executive Summary

  • Peruvian coffee production for 2026/2027 is estimated at 4.78 million 60 kg bags, broadly unchanged from the previous year.
  • Harvested area is estimated at 340,000 hectares, up about 1% from last season.
  • Exports are estimated at 4.55 million bags, also unchanged, supported by stable supply and strong demand for high-quality Arabica.
  • The United States is the largest market for Peruvian coffee with a 32% share, followed by Germany (16%) and Belgium (11%).
  • Over 90% of coffee is grown by smallholders on plots smaller than 5 hectares.
  • Peru is the world’s largest exporter of organic coffee, with approximately 90,000 certified hectares.
  • Domestic consumption is estimated at 305,000 bags, with 75% being soluble coffee.

The USDA Foreign Agricultural Service office in Lima estimates Peruvian coffee production for marketing year 2026/2027 at 4.78 million 60 kg bags, broadly unchanged from 2025/2026 (4.76 million bags). Total exports are estimated at 4.55 million bags, also broadly unchanged, supported by stable supply and continued demand for high-quality Arabica and certified coffees. Domestic consumption is estimated at 305,000 bags.

Harvested area is estimated at 340,000 hectares in 2026/2027, up about one percent from 2025/2026. The number of bearing trees is estimated at 630 million, while total tree population is estimated at 668 million trees. Arabica is the dominant coffee type, primarily of the Typica and Caturra varieties. Most farms are small (under 5 hectares) and rely on traditional methods like shade-growing, hand-picking, and sun-drying.

Credit Access and Infrastructure Challenges

Limited access to credit remains a major challenge for small producers. Private banks often reject untitled land as collateral, forcing farmers to rely on informal lenders or buyers. This results in burdensome fixed-price contracts and high interest rates.

Many farmers join cooperatives to obtain better prices, technical support, and marketing resources. However, infrastructure challenges, particularly poor roads and inadequate storage facilities, continue to limit Peru’s competitiveness in global coffee markets.

Table 1: Peru Coffee Production, Supply and Distribution (1,000 60 kg bags)

Item 2024/2025 2025/2026 2026/2027
Planted Area (1,000 HA) 370 370 375
Harvested Area (1,000 HA) 332 335 340
Arabica Production (1,000 bags) 3,700 4,200 4,780
Robusta Production (1,000 bags) 0 0 0
Total Production (1,000 bags) 3,700 4,764 4,780
Total Exports (1,000 bags) 3,440 4,238 4,550
Domestic Consumption (1,000 bags) 220 300 305
Ending Stocks (1,000 bags) 28 26 21

Production, Yields and Risks

Based on estimated production and harvested area, average yields in 2026/2027 are implied at approximately 843 kilograms per hectare. Yields vary significantly, with well-managed plantations achieving up to 45 bags (2,700 kg) per hectare.

Labor has the highest production cost, accounting for about 58% of total expenses, followed by fertilizers (24%) and agrochemicals (12%).

Peru’s coffee sector faces several risks that could affect production and export performance in 2026/2027:

  • Climate variability: Irregular rainfall, higher temperatures, and extreme weather events affect flowering, yields, and quality.
  • EUDR compliance: Meeting the EU Deforestation Regulation requirements remains a major challenge, especially for smallholders lacking land titles and georeferenced data.
  • Labor constraints: Rising labor costs and shortages during peak harvest periods increase production costs.

Exports and Key Markets

Peruvian coffee exports in 2026/2027 are estimated at 4.55 million bags, nearly unchanged from 2025/2026. Bean exports account for most shipments at 4.25 million bags, while roasted and ground exports are estimated at 300,000 bags and soluble exports at 4,000 bags.

The United States remained the top destination in 2024/2025, receiving 32% of exports, followed by Germany (16%) and Belgium (11%).

Export prices rose sharply in 2025/2026, averaging $7,577 per ton, 55% above the previous year. Prices are expected to remain above historical averages due to continued supply uncertainty, higher production costs, and sustained demand for high-quality Arabica.

Peru is the world’s leading exporter of organic coffee, with approximately 90,000 hectares certified organic. Many additional hectares are effectively organic due to limited use of chemical inputs. To meet foreign demand for specialty coffee, many producers pursue certification programs including Fair Trade, Organic, Rainforest Alliance, and Starbucks C.A.F.E. Practices.

Domestic Consumption and Policies

Domestic coffee consumption in 2026/2027 is estimated at 305,000 bags, up about two percent from 2025/2026. Soluble coffee accounts for 75% of total domestic consumption. However, consumption patterns are evolving, with a growing preference for roasted and ground coffee, especially among young urban consumers. Despite these trends, domestic consumption still represents only about six percent of total production.

Through the Food for Progress Program, FAS financed the regional MOCCA project to strengthen coffee value chains. In Peru, MOCCA has trained over 27,000 producers, supported the establishment of 515 nurseries, and facilitated nearly $17 million in credit.

Peruvian coffee producers have expressed concerns over the EU Deforestation Regulation (EUDR), which requires that products not originate from land deforested after December 31, 2020. The National Coffee Board warns that small producers may struggle to comply due to lack of land use certifications and titles. Although Congress amended the forestry law in January 2024 to simplify certification, producers assert that more support is needed.

Peru’s coffee sector provides 855,000 jobs, primarily in remote and economically vulnerable regions. The government promotes coffee cultivation as a legal alternative to coca leaf production through the National Commission for Development and Life Without Drugs (DEVIDA).

Frequently Asked Questions

How much coffee will Peru produce in 2026/2027?

Production is estimated at 4.78 million 60 kg bags, broadly unchanged from the previous year.

What are the main export destinations for Peruvian coffee?

The United States is the largest market with 32% share, followed by Germany (16%) and Belgium (11%).

What is Peru’s position in the organic coffee market?

Peru is the world’s largest exporter of organic coffee, with approximately 90,000 certified hectares.

What percentage of Peruvian coffee is grown by smallholders?

Over 90% of coffee is grown by smallholders on plots smaller than 5 hectares.

How much coffee does Peru consume domestically?

Domestic consumption is estimated at 305,000 bags, with 75% being soluble coffee.

Author: Qahwa World – Lima | Source: USDA Foreign Agricultural Service – Report PE2026-0008 | Date: May 20, 2026

Nicaraguan Coffee Output Falls 8% in 2026

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Author: Qahwa World – Managua

Source: USDA Foreign Agricultural Service – Report NU2026-0003
Date: May 20, 2026

Nicaraguan Coffee Output Falls 8% in 2026

Executive Summary

  • Nicaraguan coffee production for 2026/2027 is forecast at 2.4 million 60 kg bags, down 8% from the recent high of 2.6 million bags.
  • High probability of El Niño in the second half of 2026, typically associated with droughts in Central America, threatens grain filling and yields.
  • Fertilizer costs have risen 25% due to global shipping disruptions in the Strait of Hormuz.
  • Exports forecast at 2.25 million bags. United States is the largest market with 35% share, followed by the European Union with 32%.
  • About 45,000 farmers cultivate 143,000 hectares, including 7,000 hectares of Robusta.
  • More than 600,000 Nicaraguans (10% of the population) have left the country since 2018, exacerbating labor shortages.
  • Brazil’s projected 23% increase in Arabica output could create a global surplus and drive prices down 35%, hurting Nicaraguan farmer profitability.

The USDA Foreign Agricultural Service office in Managua forecasts Nicaraguan coffee production (including Robusta) for marketing year 2026/2027 at 2.4 million 60 kg bags, 8% below the recent high of 2.6 million bags.

Although farmers reported good flowering in March and April 2026, the high probability of El Niño in the second half of 2026, typically associated with droughts in Central America, could significantly impact grain filling, quality, and yield.

Fertilizer costs have risen 25% due to global shipping disruptions in the Strait of Hormuz, presenting another factor that could reduce the crop.

FAS Managua estimates total production for 2025/2026 at 2.56 million bags, down 4% from the previous year. An extended canícula (mid‑summer drought in July and August) impacted grain filling in some low‑altitude regions. Despite lower production, farmers characterized the 2025/2026 harvest as highly successful due to record‑breaking prices; exporters paid up to $290 per bag for exportable coffee.

The industry largely avoided significant labor shortages as a more balanced harvest cycle eliminated typical peaks in worker demand, though some regions still reported shortages affecting harvest completion. One large farmer estimated losing 30% of his harvest due to lack of coffee pickers.

El Niño and Higher Fertilizer Costs Threaten Next Season

NOAA has forecast a 62% probability of El Niño (potentially a “Super El Niño”) developing by mid‑2026. This weather event is associated with droughts in Nicaragua and the region, which could significantly reduce yields and increase pest vulnerability. Meanwhile, fertilizer prices have risen 25% in the first half of 2026 due to global shipping disruptions in the Strait of Hormuz, adding further pressure on growers.

Beyond weather risk and rising input costs, coffee exporters are concerned that Brazil’s projected 23% increase in Arabica production in 2026/2027 may create the largest global surplus in five years and drive prices down by as much as 35%, undermining farmer profitability. Despite these challenges, the coffee industry remains optimistic, and FAS Managua believes Nicaragua will continue supplying high‑quality coffee in the years ahead.

Planted Area and Labor Shortages

FAS Managua projects planted area for 2026/2027 to remain unchanged at 143,000 hectares, with harvested area slightly lower at 141,000 hectares due to labor shortages resulting from increased outbound migration over the last five years. There are approximately 45,000 coffee growers cultivating about 143,000 hectares, of which 7,000 hectares are planted with Robusta varieties. More than 85% of Arabica coffee farms are in North Central Nicaragua (departments of Jinotega, Matagalpa, and Nueva Segovia), while Robusta production is concentrated in the Southern Caribbean Coast Autonomous Region.

According to industry contacts, more than 600,000 Nicaraguans (10% of the population) have fled the country since 2018, worsening labor shortages in the agricultural sector. One large farmer estimated losing 30% of his harvest due to lack of coffee pickers.

Table 1: Nicaragua Coffee Production, Supply and Distribution (1,000 60 kg bags)

Exports and Key DestinationsFAS Managua estimates Nicaraguan coffee exports will reach 2.25 million bags in 2026/2027, reflecting the anticipated production decline. The United States was the largest market for Nicaraguan coffee in 2024/2025, accounting for 35% of all exports. Most of these shipments are high‑quality Arabica beans demanded by specialty coffee roasters and cafes. The European Union is the second‑largest market, with approximately 32% share, where buyers particularly seek organic and fair‑trade coffees. Exporters are exploring opportunities to expand sales into China, as the United States and Europe are considered mature markets with limited growth prospects.Table 2: Nicaraguan Coffee Exports by Destination (60 kg bags)Policies and Structural ChallengesLaw 853 (Law for the Transformation and Development of the Coffee Sector), enacted in 2013, is one of the government’s main policies to support coffee growers. It levies a fee on each exported 60 kg bag, averaging $4 per bag in 2025/2026. Industry sources estimate the law has collected more than $40 million since 2013. However, growers have mixed opinions about its impact; some have benefited from the renovation fund, while others view the export fee as a financial burden.In contrast, in 2019 the government imposed taxes on fertilizers and agrochemicals for the first time, with import duties reaching up to 30% for certain products. This development diminishes profitability gains from earlier tax exonerations and reduces growers’ access to essential inputs like fertilizer. Coffee employs more than 330,000 people along the value chain, making it one of Nicaragua’s most important economic activities.Frequently Asked Questions

How much coffee will Nicaragua produce in 2026/2027?

Production is forecast at 2.4 million 60 kg bags, down 8% from the recent high of 2.6 million bags.

What is causing the expected decline?

A high probability of El Niño causing drought, plus a 25% increase in fertilizer costs due to shipping disruptions in the Strait of Hormuz.

What are the main export destinations for Nicaraguan coffee?

The United States (35%) and the European Union (32%) are the largest markets, followed by Belgium, Germany, and Canada.

How many farmers and how much land are involved?

Approximately 45,000 farmers cultivate 143,000 hectares, including 7,000 hectares of Robusta.

How does Brazil’s production increase affect Nicaragua?

Brazil’s projected 23% rise in Arabica output could create a global surplus and push prices down by up to 35%, hurting Nicaraguan farmer profitability.

Author: Qahwa World – Managua | Source: USDA Foreign Agricultural Service – Report NU2026-0003 | Date: May 20, 2026

Item 2024/2025 Official 2025/2026 Estimate 2026/2027 Forecast
Planted Area (1,000 HA) 143 143 143
Harvested Area (1,000 HA) 141 141 141
Total Production (1,000 bags) 2,560 2,560 2,440
Total Exports (1,000 bags) 2,410 2,420 2,250
Domestic Consumption (1,000 bags) 160 160 160
Ending Stocks (1,000 bags) 130 130 85
Country 2022/2023 2023/2024 2024/2025
United States 1,113,500 850,266 895,066
Belgium 280,180 427,268 470,917
Germany 101,075 116,693 221,633
Canada 73,393 78,167 81,383
Italy 98,275 72,767 89,933
Mexico 10,218 4,467 82,183

Ethiopian Coffee Output Rises 4.7% in 2026

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Author: Qahwa World – Addis Ababa

Source: USDA Foreign Agricultural Service – Report ET2026-0005
Date: May 20, 2026

Executive Summary

  • Ethiopian coffee production for marketing year 2026/2027 is forecast at 12.10 million 60 kg bags, up 4.7%.
  • Harvested area is forecast at 800,000 hectares, a 1.3% increase from the previous year.
  • Exports are forecast at 7.13 million bags, up 2.4%, supported by growing demand for Ethiopian Arabica.
  • China emerged as the third largest market in 2024/2025, with exports surging 264% to 670,000 bags.
  • Red cherry prices hit record highs of 220‑250 Birr per kg in Yirgacheffe, nearly four times the previous season.
  • About 5.9 million farmers are engaged in coffee production; smallholders account for 90% of national output.
  • The government allocated 100,000 hectares for private mechanized coffee farms to transform the sector.

The USDA Foreign Agricultural Service office in Addis Ababa forecasts Ethiopian coffee production for marketing year 2026/2027 at 12.10 million 60 kg bags, a 4.7% increase from the previous season. T

he growth is driven by improved yields under normal weather conditions. Harvested area is forecast at 800,000 hectares, up 1.3% from the estimated area for 2025/2026.

Exports are forecast at 7.13 million bags, supported by growing demand for Ethiopian Arabica beans. Marketing year 2025/2026 constitutes an exceptional period for Ethiopia’s coffee export sector, as record high fresh cherry prices and rising operating costs continue to place significant financial pressure on traders and exporters. China is rapidly emerging as one of the top coffee buyers, driven by its tariff free market access.

Production Gains Supported by Improved Yields and Area Expansion

The forecast assumes favorable weather conditions, particularly regular rainfall. In April 2026, farmers reported healthier flowering and more uniform cherry development across key producing regions. The southern regions are expected to experience a positive year after reporting a reduced harvest during the 2025/2026 season. The Ethiopian Coffee and Tea Authority reports that 5.9 million farmers are engaged in coffee production across the country. Smallholder farmers dominate Ethiopia’s coffee sector, accounting for 90% of total national production. These farmers typically cultivate coffee on small plots averaging less than half a hectare, often integrating coffee trees into mixed farming systems alongside food crops.

At the farm level, growing adoption of improved agronomic practices such as pruning and stumping of aging trees, along with increased use of recommended extension packages including composting and soil management techniques, is supporting productivity gains. Farmers are also becoming more aware of the benefits of stumping old coffee trees and intercropping. The gradual uptake of improved seedlings that are both higher yielding and more disease resistant is beginning to contribute to enhanced productivity.

Table 1: Ethiopia Coffee Production Estimate and Forecast

Marketing Year 2024/2025 (Estimate) 2025/2026 (Estimate) 2026/2027 (Forecast)
Area Harvested (hectares) 760,000 790,000 800,000
Production (million bags) 11.46 11.56 12.10
Yield (MT/ha) 0.90 0.90 0.91

National Stumping Campaign Boosts Yields

According to industry sources, nearly 70% of Ethiopia’s coffee trees are old, with some estimated to be more than 100 years old. Following the launch of a national stumping campaign four years ago, the Ethiopian Coffee and Tea Authority reports that stumped trees have already begun producing yields. Stumped trees cover 15% of the total coffee harvested area in 2025/2026. The Oromia region recorded the highest stumping rate at 19% of total harvested area, followed by South Ethiopia region at 14% and Sidama at 13%. Studies in Sidama and South Ethiopia regions have demonstrated that stumped coffee trees can increase yields by up to threefold within four years after stumping.

The Ethiopian Agricultural Research Institute reports that over 50 improved varieties offering higher yields and stronger disease resistance have been distributed to coffee growers across the country. These improved hybrid varieties yield around 2.8 tons per hectare under better management conditions, compared with current national average yields of less than 1.0 ton per hectare.

Ethiopia Pushes for Mechanized and Commercial Farms

The Government of Ethiopia is interested in large scale modern coffee production and has allocated 100,000 hectares of land for private sector coffee development. This marks the first time the government has allocated large tracts of land exclusively for modern coffee production. This represents a 70% increase compared to the country’s current 143,000 hectares of commercial coffee farms. Local officials describe the initiative as a strategic national project designed to transform Ethiopia’s coffee sector from its current reliance on traditional smallholder farming into a hybrid model that combines established practices with large scale technology driven production. Reports from May 2026 show that 110 private investors received new farmland for coffee cultivation. Planting has not yet begun, and authorities are urging investors to start developing the farmlands quickly.

Record Cherry Prices and Tightening Washed Coffee Supply

Farmers anticipated that the previous year’s record high coffee prices would maintain momentum, driving local cherry prices to unprecedented levels. At the start of 2025/2026, cherry prices tripled in some areas and quadrupled in others compared to the previous season. Several farmer cooperatives in Yirgacheffe district reported that red cherry prices peaked at 220‑250 Birr ($1.42‑$1.62) per kilogram in December 2025, nearly four times higher than the previous season. This sharp price hike, combined with rising production costs including labor expenses, created significant challenges for wet mills.

As a result, a notable shift in coffee processing practices occurred. Several farmers opted to process coffee at home rather than sell red cherries to washing stations, capturing higher returns by drying and selling natural coffee themselves. Simultaneously, wet mills became less inclined to purchase fresh cherries due to price increases and elevated working capital requirements. Farmers retaining cherries and wet mills reducing purchases significantly decreased the volume of red cherries reaching washing stations, leading to tighter availability of washed coffee during 2025/2026, alongside a growing share of natural processed coffee beans.

China Emerges as Third Largest Market

In 2024/2025, Ethiopia exported around 670,000 bags to China, generating more than $274 million in revenue. This positioned China as the third largest destination for Ethiopian coffee, a sharp rise from a decade ago when China ranked 17th with exports of approximately 22,000 bags. The pace of this growth highlights how quickly China has moved from a marginal buyer to a major player. Chinese imports have been driven by targeted trade promotion, improved market access, and strengthening commercial linkages. Since December 1, 2024, Ethiopian exports to China have enjoyed tariff free access, and China expanded its zero tariff policy to cover all tariff lines for products from 53 African countries effective May 1, 2026.

According to a USDA report, China’s domestic coffee market was estimated at approximately $42 billion in 2024, as coffee consumption rises rapidly among younger urban consumers. China’s coffee consumption reached 6.3 million bags by the end of 2024, but per capita consumption remains low at 22 cups annually, indicating substantial room for future expansion. Large chains such as Luckin Coffee (over 26,000 stores) and Cotti Coffee (around 15,000 outlets) continue to scale aggressively, shaping consumer habits and fueling demand for high quality beans.

Table 2: Top 10 Export Destinations for Ethiopian Coffee (MY 2024/2025)

Rank Country Volume (1,000 bags) Share
1 Saudi Arabia 1,182 15.9%
2 Germany 1,126 15.2%
3 China 670 9.0%
4 Belgium 651 8.8%
5 United States 614 8.3%
6 UAE 444 6.0%
7 South Korea 381 5.1%
8 Italy 259 3.5%
9 Russia 171 2.3%
10 Sudan 117 1.6%

Domestic Consumption Expands Despite High Prices

Domestic coffee consumption for 2026/2027 is forecast at 5.0 million bags. Post revised the 2025/2026 domestic consumption estimate upward from 3.70 million bags to 4.50 million bags, reflecting current market dynamics where falling global coffee prices are anticipated to redirect more supply domestically. Burgeoning demand in both rural and urban centers, as well as the increasingly emerging coffee culture among youth, is driving domestic consumption. Ethiopia ranks among the largest coffee consuming countries globally within the group of major producers. Per capita consumption is estimated at around 2.0 kilograms per year.

EUDR Compliance and Organic Certification Challenges

Ethiopia is making progress toward compliance with the EU Deforestation Regulation, which takes effect on December 30, 2026 for large businesses and June 30, 2027 for smaller enterprises. The Ethiopian Coffee and Tea Authority is working with international development partners and private sector stakeholders to operationalize a national traceability platform. Hundreds of thousands of smallholder plots have already been mapped and registered. However, challenges remain due to Ethiopia’s fragmented smallholder production system, limited digital infrastructure, and remoteness of many producing areas.

The EU’s updated organic regulation (Regulation 2018/848) became fully binding for non EU exporters on January 1, 2025, ending the previous equivalence system. The minimum annual on site inspection sampling rate has risen from approximately 2% to 5% of farmers, while at least 2% must now undergo residue sampling. The regulation also caps group certifications at roughly 2,000 smallholders and mandates annual audits for all certified operators. These stricter requirements are causing longer field inspection times, rising compliance costs, and increasing administrative burdens, making EU organic certification increasingly difficult for Ethiopian smallholder coffee farmers to maintain.

Frequently Asked Questions

How much coffee will Ethiopia produce in 2026/2027?

Production is forecast at 12.10 million 60 kg bags, a 4.7% increase from the previous year.

How many farmers are engaged in coffee production in Ethiopia?

About 5.9 million farmers, with smallholders accounting for 90% of national output.

What are the main export destinations for Ethiopian coffee?

Saudi Arabia and Germany are the largest with 15.9% and 15.2% shares, followed by China, Belgium, and the United States.

How much coffee did Ethiopia export to China in 2024/2025?

Around 670,000 bags worth $274 million, a 264% increase from the previous year, making China the third largest market.

Why are red cherry prices so high in 2025/2026?

Farmers anticipated continued momentum from record prices the previous year, driving local cherry prices to unprecedented levels, reaching 220‑250 Birr per kg in Yirgacheffe.

How is Ethiopia preparing for the EU Deforestation Regulation?

The Ethiopian Coffee and Tea Authority is developing a national traceability platform with international partners; hundreds of thousands of smallholder plots have already been mapped and registered.

Author: Qahwa World – Addis Ababa | Source: USDA Foreign Agricultural Service – Report ET2026-0005 | Date: May 20, 2026

Costa Rican Coffee Output Rises 3.5% in 2026

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Author: Qahwa World – San Jose

Source: USDA Foreign Agricultural Service – Report CS2026-0004
Date: May 20, 2026

Executive Summary

  • Costa Rica coffee production for marketing year 2026/2027 is forecast at 1.2 million 60 kg bags, up 3.5%.
  • Several factors limit growth despite the biennial high year: strong local currency, high fertilizer prices, lower coffee prices, and expected El Niño.
  • The Costa Rican Colon has appreciated roughly 35% since mid-2022, cutting farmer revenues in local currency.
  • Coffee prices dropped from $574 per bag in October 2025 to $378 in April 2026.
  • El Niño is expected to affect Costa Rica in the second half of 2026, potentially reducing rainfall by up to 30% in some areas.
  • Exports forecast at 1.06 million bags; United States remains top destination with 39.6% share in 2024/2025.
  • The number of coffee farmers fell 48% in ten years to 24,653 in 2024/2025.

The USDA Foreign Agricultural Service office in San Jose forecasts Costa Rican coffee production for marketing year 2026/2027 to increase marginally to 1.2 million 60 kg bags, a 3.5% rise from the previous year.

Although the next marketing year is expected to be the higher production year under the biennial coffee production cycle, several factors will limit growth. These include a strong local currency, lower coffee prices, higher fertilizer and fuel prices, and potential abnormal weather patterns caused by El Niño.

According to ICAFE (Costa Rican Coffee Institute), the coffee sector is preparing for the continued negative effects of a very strong local currency against the US dollar.

The Costa Rican Colon has appreciated roughly 35% since mid-2022. Since most of the coffee is exported, even at historically high coffee prices, the colon denominated revenue has declined sharply because of the exchange rate, directly affecting farmer profitability.

ICAFE also reported that coffee prices have declined from $574 per 60 kg bag in October 2025 to $378 in April 2026, creating expectations of lower future income.

El Niño Threatens the Next Season

The Costa Rican National Meteorological Institute confirmed that El Niño will most likely affect Costa Rica during the second half of 2026. This could result in a reduction of rainfall of up to 30% of the normal amount in some areas of the country, primarily in the Northern Pacific. Although coffee production areas may not be as negatively affected, the timing of the phenomenon will determine whether the effects are mild or strong on coffee production.

FAS/San Jose expects coffee producers to face continued labor supply challenges. Panamanian workers from the Ngabe Bugle tribes now harvest most of the coffee crop, although Nicaraguans also participate. According to ICAFE, the inflow of field workers has been affected by slow migratory processes, causing uncertainty among growers.

Declining Area and Number of Farmers

According to the latest available area survey from 2022, planted area declined by 11.9% compared to the previous data set from 2018. FAS/San Jose projects MY 2026/2027 area planted to remain unchanged at approximately 83,000 hectares. However, industry sources suggest that some less productive producers may leave the activity altogether or reduce plantation maintenance given the difficult situation.

According to ICAFE, the number of coffee growers in the country declined to 24,653 farmers in MY 2024/2025 from 25,549 in MY 2023/2024. This number is down 48% from ten years ago. Long periods of low coffee prices, aging farmers, and high land prices near urban areas have contributed to the declining number of producers.

Table 1: Estimated MY 2025/2026 Area Planted (hectares)

Coffee Region 2018 2022 Change
Los Santos (Tarrazú) 27,944 28,519 2.1%
Occidental Valley 21,992 18,640 -15.2%
Central Valley 13,327 11,493 -13.8%
Perez Zeledón (Brunca) 13,315 10,617 -20.3%

Exports, Imports, and Consumption

FAS/San Jose projects MY 2026/2027 coffee exports at 1.06 million bags due to expected higher production. MY 2025/2026 exports are projected at 1.02 million bags. ICAFE reported that uncertainty in the Middle East recently pushed international buyers to increase purchases to secure product availability, while buyers were very cautious in late 2025.

The United States has been the main destination for Costa Rican exports for several years, although its market share has declined recently. The US share of total exports was 39.6% in MY 2024/2025, slightly higher than 38% in MY 2023/2024. The European Union is the other large destination.

Domestic consumption is projected unchanged at 320,000 bags in MY 2026/2027, due to slow population growth and relatively high prices. Costa Rica’s population is 5.3 million, with legal immigration low and population growth less than 1% per year. Domestic prices have risen almost 40% since 2022 due to inflationary pressures and higher international coffee prices.

Table 2: Green Coffee Exports by Destination (60 kg bags)

Country 2022/2023 2023/2024 2024/2025
United States 506,098 386,307 454,266
Belgium 128,290 282,162 269,551
Germany 93,990 60,347 57,089
South Korea 28,312 29,164 32,658
Japan 21,022 25,656 23,841
China 12,504 16,384 29,025
Total 1,002,321 1,017,105 1,102,439

EUDR Compliance: Deforestation Free Coffee

ICAFE continues to consolidate the scheme for marketing deforestation free coffee, in compliance with the European Union Green Deal requirements for deforestation free verification. The institution is strengthening its information systems to ensure georeferenced product traceability, to register due diligence statements, and to guarantee informed consent of growers. It also expanded training and technical assistance to producers, mills, and exporters.

On March 14, 2024, Costa Rica exported the first shipment of deforestation and degradation free coffee to Italy as part of a pilot program involving a local cooperative, the United Nations Development Programme, and ICAFE. The pilot involved 69 coffee growers (about 0.3% of all growers). The goal was to develop an effective and practical method for evaluating and documenting Costa Rican coffee compliance with the demanding requirements to be considered deforestation free.

Frequently Asked Questions

How much coffee will Costa Rica produce in 2026/2027?

Production is forecast at 1.2 million 60 kg bags, an increase of 3.5% from the previous year.

What are the biggest challenges facing Costa Rica’s coffee sector?

A strong local currency (Colon up 35% since mid-2022), high fertilizer prices, lower coffee prices, and expected El Niño.

How has the exchange rate affected farmer revenues?

Despite higher export prices in dollars, the strong Colon reduced local currency revenues by about 9% in 2025/2026 compared to the previous season.

What are the main export destinations for Costa Rican coffee?

The United States is the top destination with 39.6% of the total, followed by Belgium, Germany, South Korea, Japan, and China.

How many coffee farmers are there in Costa Rica?

There were 24,653 farmers in 2024/2025, down 48% from ten years ago.

Is Costa Rica ready for the EU Deforestation Regulation?

Yes. A successful pilot program was launched in 2024, and ICAFE is strengthening geotraceability systems and farmer training.

Author: Qahwa World – San Jose | Source: USDA Foreign Agricultural Service – Report CS2026-0004 | Date: May 20, 2026

Colombian Coffee Output Rises 7.2% in 2026

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Author: Qahwa World – Bogota

Source: USDA Foreign Agricultural Service – Report CO2026-0008
Date: May 20, 2026

Colombia Coffee Output Rises 7.2% in 2026

Executive Summary

  • Colombian coffee production for marketing year 2026/2027 is forecast to rise 7.2% to 13.4 million 60 kg bags.
  • The increase is driven by favorable dry conditions and the transition from La Niña to a strong El Niño, as coffee plants tolerate water stress well.
  • Lower coffee prices encourage replanting and renovation, supporting future growth.
  • Exports are forecast at 13.4 million bags, with the United States remaining the top destination with over 40% market share.
  • Domestic consumption remains stable at 2.2 million bags despite promotional campaigns and a new law declaring coffee the national beverage.
  • Ending stocks fall 22.6% to 670,000 bags due to higher exports and lower imports.
  • Nearly 90% of Colombian coffee shipments already comply with the EU Deforestation Regulation (EUDR).

The USDA Foreign Agricultural Service office in Bogota forecasts Colombian coffee production for marketing year 2026/2027 to reach 13.4 million 60 kg bags, an increase of 7.2% from the previous year. This growth is mainly attributed to favorable dry conditions after years of heavy rainfall.

Colombia is transitioning from La Niña, which caused excessive precipitation, to a strong El Niño expected after mid 2026.

Despite concerns about El Niño affecting crops, coffee plants tolerate water stress and high temperatures, especially when grown in soils with good moisture retention. Historically, coffee production performs better during El Niño events than during La Niña. To achieve this production level, the Colombian Coffee Growers Federation (Fedecafe) recommended proper fertilization, weed management to conserve soil moisture, efficient harvesting, and establishing temporary shade cover using appropriate plant species.

Production Drop in 2025/2026 Due to Heavy Rains

For marketing year 2025/2026, USDA estimates a 9.4% decline in production to 12.5 million bags compared to the previous estimate. This drop is due to excessive rainfall in coffee growing regions, which negatively affected flowering and bean development. Continuous rainfall prevents the water deficit necessary for flower induction, causes premature flower fall, and increases the incidence of coffee leaf rust due to high humidity.

The phytosanitary survey conducted by Cenicafe in January 2026 showed that the national average incidence of coffee leaf rust reached 4.5%, up from 3.9% in October 2025, but it remains within phytosanitary control levels. Coffee berry borer infestation reached 1.6% nationally, below the economic damage threshold of 2%. Notably, 87% of Colombia’s coffee area is planted with rust resistant varieties, up from only 35% in 2010.

Lower Prices Encourage Farm Renovation

Local coffee prices depend on the New York international price and the Colombian peso to US dollar exchange rate. Since late 2025, prices have decreased due to global optimism about coffee production and a lower exchange rate. As of February 2026, coffee prices stood at 2,174,143 Colombian pesos per 125 kg bag, 30% lower than the same period a year earlier.

Labor costs account for about 70% of coffee production expenses. These costs have risen due to a minimum wage increase of more than 20%, plus higher fertilizer costs resulting from the Middle East conflict. The sector also suffers from labor shortages as workers move to urban areas for more profitable employment.

However, lower prices create a strategic window for farm renovation. When prices are high, producers maximize harvest from existing trees. When prices fall, the opportunity cost of renovation declines, and long term returns from rejuvenated trees become more attractive.

Exports, Imports and Stocks

USDA forecasts exports for 2026/2027 at 13.4 million bags, an increase of 4.6% from the previous year. Colombia exports coffee to more than 40 countries. The United States remains the top destination with over 40% market share, followed by the European Union, Canada, and Japan. From October 2025 to February 2026, exports to the United States, Japan, and South Korea increased more than 6% year on year.

In contrast, imports for 2026/2027 are forecast to fall 18% to 2.0 million bags as domestic production recovers. For 2025/2026, imports were estimated at 2.4 million bags due to lower domestic production and higher demand for lower quality coffee from Brazil, Peru, and Ecuador to fulfill soluble coffee export commitments. Colombia mainly imports green coffee (84.1%), followed by soluble coffee (15.7%), and roasted coffee (0.2%).

Ending stocks are forecast to fall 22.6% to 670,000 bags in 2026/2027, due to higher exports and lower imports despite improved production.

Table 1: Colombia Coffee Production, Supply and Distribution (1,000 60 kg bags)

Item 2024/2025 Official 2025/2026 Estimate 2026/2027 Forecast
Total Production 14,800 12,500 13,400
Total Imports 980 2,404 2,004
Total Exports 13,380 12,810 13,400
Domestic Consumption 2,150 2,200 2,200
Ending Stocks 918 866 670

Domestic Consumption and Government Policies

Domestic coffee consumption is forecast to remain stable at 2.2 million bags in 2026/2027. Despite expected moderate improvements in economic activity, high inflation (6.3% in 2026) and high coffee prices limit growth. Per capita coffee consumption in Colombia is about 3.08 kg per year, which is relatively low compared to more than 6 kg in most producing countries.

Fedecafe continues to promote domestic consumption through its campaign “Look for the Colombian Coffee Quality Triangle”. The triangular “Cafe de Colombia” logo guarantees 100% Colombian origin coffee, and about 850 brands use it. The government also enacted Law 2504 of 2025, which declares coffee the national beverage, promotes its consumption, and allows public entities to purchase national coffee and include it in food programs.

In April 2024, the Coffee Price Stabilization Fund Committee established the Coffee Income Compensation Mechanism (MECIC 2024). This mechanism provides direct financial support to growers when the rolling average domestic price falls below the average production cost. It has not been activated yet because prices have remained above the reference cost.

EU Deforestation Regulation Compliance

Colombian coffee producers are actively implementing traceability measures to comply with the European Union Deforestation Regulation (EUDR) 2023/1115. Colombia exports more than 20% of its coffee production to the EU. The compliance deadline is December 30, 2025 for medium and large companies, and June 30, 2026 for micro and small enterprises.

According to Fedecafe, nearly 90% of Colombian coffee lots already comply with the EU regulation. The federation has trained producers on the new legal requirements and created a geospatial platform that allows users to map their farm coordinates.

Frequently Asked Questions

How much coffee will Colombia produce in 2026/2027?

Production is forecast to reach 13.4 million 60 kg bags, an increase of 7.2% from the previous year.

Why did production drop in 2025/2026?

Production fell 9.4% to 12.5 million bags due to excessive rainfall that affected flowering and bean development.

How does El Niño affect Colombian coffee production?

Historically, coffee production performs better during El Niño because coffee plants tolerate water stress well, especially in soils with good moisture retention.

What are the main export destinations for Colombian coffee?

The United States is the top destination with over 40% market share, followed by the European Union, Canada, and Japan.

What percentage of Colombian coffee complies with the EUDR?

Nearly 90% of Colombian coffee lots already comply with the EU Deforestation Regulation.

How do lower coffee prices affect farmer decisions?

Lower prices reduce the opportunity cost of renovation, encouraging farmers to replant old trees for higher long term productivity.

Author: Qahwa World – Bogota | Source: USDA Foreign Agricultural Service – Report CO2026-0008 | Date: May 20, 2026

Tanzania Coffee Production to Rise 10 Percent in 2026/27

Posted on by Qahwa World
Author: Qahwa World
Source: USDA Foreign Agricultural Service (FAS) Dar es Salaam
Date: May 20, 2026
Executive Summary:

  • FAS Dar es Salaam forecasts Tanzania coffee production to reach 1.6 million 60 kg bags in MY 2026/27, a 10.3 percent increase year on year.
  • The growth is driven by rehabilitated fields from 2019 to 2024 reaching full maturity and rising coffee prices incentivizing farmer investment.
  • Cultivated area is expected to expand from 270,000 hectares to 275,000 hectares, with harvested area increasing to 270,000 hectares.
  • Green bean exports are projected to rise 2.9 percent to 1.4 million bags, supported by higher production and strong global demand.
  • The European Union remains Tanzania’s leading coffee importer, purchasing five times more than the United States.
  • Domestic consumption is projected to increase from 85,000 to 90,000 bags, driven by growing urban coffee culture in Dar es Salaam and Arusha.
  • Ending stocks are expected to rise sharply to 157,000 bags due to production outpacing consumption and export growth.

Tanzania’s coffee production is projected to reach 1.6 million 60 kilogram bags in the 2026/27 marketing year, up from 1.45 million bags the previous year, representing a 10.3 percent increase.

This growth is attributed to rehabilitated fields from 2019 to 2024 reaching full maturity. Rising coffee prices have incentivized farmers to expand plantations, invest in advanced fertilizers and equipment, and enhance efficiency.

Stable prices have strengthened cooperative societies, expanding support and training for growers. Favorable rainfall and steady temperatures have improved growing conditions, helping the sector recover from past droughts and increasing yields. Strong global demand continues to drive production and exports, reinforcing Tanzania’s position in the coffee market.

Crop Area Expansion

Tanzania’s coffee sector is expected to expand by nearly two percent, with cultivated area rising from 270,000 hectares in MY 2025/26 to 275,000 hectares in MY 2026/27. This rise is driven mainly by robusta farmers in Kagera and Kigoma who are opening new land and are supported by subsidized seedlings and strong farm gate prices. Harvested area is projected to increase by a similar percentage from 265,000 hectares to 270,000 hectares as new farms mature.

Coffee is the country’s leading cash crop, grown by over 40 percent of farmers and covering 39 percent of permanent cropland. Production occurs through three systems: pure stand smallholder farms in the south, coffee banana intercropping in the north and west, and larger estates. Overall, larger estates contribute under 10 percent of output. Most smallholders cultivate about 0.63 hectares with older trees and 400 to 2,000 trees per farm. Tanzania produces arabica in the northern and southern highlands and robusta almost entirely in Kagera near Lake Victoria.

Production and Inputs

Indicator MY 2024/25 MY 2025/26 MY 2026/27 (Forecast)
Area harvested (1000 HA) 265 265 270
Arabica production (1000 bags) 700 750 850
Robusta production (1000 bags) 650 700 750
Total production (1000 bags) 1,350 1,450 1,600
Bean exports (1000 bags) 1,250 1,360 1,400
Domestic consumption (1000 bags) 77 85 90
Ending stocks (1000 bags) 50 51 157

Tanzania is one of the three leading producers of the Colombian mild arabica variety, contributing about six percent of global supply. Roughly 320,000 smallholder farmers produce 90 percent of the crop, with about 100 large estates accounting for the rest.

Fertilizer subsidies in Tanzania primarily support tobacco, corn, and rice producers, with minimal assistance directed toward coffee farmers. In February 2026, the government reduced its fertilizer subsidy from covering roughly half the market price to a flat rate of approximately 0.38 US dollars per 50 kg bag. High fertilizer prices have long prevented farmers from applying adequate nutrients, keeping average use near 50 kilograms per hectare.

Policy and Trade

Tanzania is expanding climate resilient coffee varieties, widening cultivation, improving input support, and upgrading processing and agronomic practices. Recent reforms include a 30 million US dollar memorandum of understanding with Corus International that focuses on large scale seedling distribution, stronger disease control programs, digitalized auctions, and tighter export licensing rules. The policy aims to boost transparency, traceability, and competitiveness in premium markets.

The Tanzania Coffee Board’s directive of April 24, 2026, established benchmark prices of 4.61 US dollars per kilogram for processing unit parchment arabica, 3.65 dollars for home processed parchment arabica, 1.54 dollars for robusta dry cherry, and 1.96 dollars for hard arabica dry cherry.

Green bean exports are projected to rise 2.9 percent to 1.4 million bags in MY 2026/27, supported by higher production and strong global demand. The European Union remains Tanzania’s leading coffee importer, purchasing five times more than the United States. Japan also remains a key destination for Tanzanian coffee, particularly for premium arabica.

Export Destinations and Soluble Coffee Decline

Destination 2022 (bags) 2023 (bags) 2024 (bags) 2025 (bags)
European Union 588,354 749,451 652,891 596,487
Japan 281,684 204,779 200,254 193,718
United States 58,841 79,586 112,720 128,032
Morocco 49,678 93,941 52,226 69,192
India 17,928 36,326 50,934 30,594

The United States is rapidly emerging as a major growth market for Tanzanian coffee, with imports rising from 58,841 bags in 2022 to 128,032 bags in 2025. Meanwhile, soluble coffee exports from Tanzania collapsed dramatically between 2022 and 2025, falling from 10,858 bags to just 814 bags, a drop of more than 92 percent. The EU and Kenya, once the two largest buyers, slashed imports from several thousand bags to only 446 and 88 bags respectively by 2025.

Domestic Consumption and Stocks

Tanzania’s coffee consumption is projected to increase from 85,000 to 90,000 bags in 2026/27, driven primarily by a growing urban coffee culture in Dar es Salaam and Arusha. Rising incomes and urbanization are encouraging younger professional consumers to incorporate coffee into their daily routines. Tourism further reinforces demand, as hotels and operators serving visitors expand their coffee offerings.

Projected coffee stocks for MY 2026/27 are expected to rise sharply to 157,000 bags, up from 51,000 bags in MY 2025/26, reflecting a significant supply driven buildup. The surge is primarily the result of higher production outpacing the country’s relatively modest growth in domestic consumption and exports.

Frequently Asked Questions (FAQ)

1. How much will Tanzania coffee production increase in 2026/27?

FAS Dar es Salaam forecasts a 10.3 percent increase to 1.6 million 60 kg bags, driven by rehabilitated fields reaching maturity and rising prices.

2. What is driving the expansion of coffee area in Tanzania?

Robusta farmers in Kagera and Kigoma are opening new land, supported by subsidized seedlings and strong farm gate prices. Cultivated area is expected to reach 275,000 hectares.

3. Which countries are the top buyers of Tanzanian coffee?

The European Union remains the leading importer, followed by Japan and the United States, which has shown rapid growth in recent years.

4. What happened to Tanzania’s soluble coffee exports?

Soluble coffee exports collapsed by more than 92 percent between 2022 and 2025, falling from 10,858 bags to just 814 bags.

5. How is domestic coffee consumption changing in Tanzania?

Domestic consumption is projected to rise from 85,000 to 90,000 bags, driven by growing urban coffee culture in Dar es Salaam and Arusha and rising tourism demand.

6. Why are ending stocks expected to increase sharply?

Production is outpacing the relatively modest growth in domestic consumption and exports, leading to a supply driven buildup to 157,000 bags.

Qahwa World – Based on USDA FAS Coffee Annual report TZ2026-0003 by Benjamin Mtaki, approved by Damian Ferrese.
Published: May 20, 2026

ICO Coffee Market Report April 2026: Global prices fall 2.7% as supply outlook outweighs Strait of Hormuz disruption

Posted on by Qahwa World

Author: Qahwa World – London

Source: International Coffee Organization (ICO) – Coffee Market Report, April 2026
Report number: N/A (monthly market report)
Date: May 2026

ICO Composite Indicator Price averages 266.24 US cents/lb; Robusta drops 6.9% (fifth consecutive monthly decline); certified stocks remain at historically low levels.

LONDON, May 2026 — The International Coffee Organization (ICO) Composite Indicator Price (I‑CIP) averaged 266.24 US cents per pound in April 2026, a 2.7 percent decrease from March 2026. The market balanced two opposing forces: the closure of the Strait of Hormuz since 4 March, which pushed crude oil prices up by 55.8 percent and shipping freight costs by 43.6 percent between 27 February and 30 April, against a continued improvement in the global supply outlook. On balance, the supply‑side factor outweighed the geopolitical disruption, erasing most of March’s gains.

All coffee groups recorded losses in April, with Robusta suffering the steepest decline. The ICO report highlights that since the end of coffee year 2024/25, Robusta prices have dropped 21.9 percent, while the I‑CIP fell 18.0 percent and the three Arabica groups declined by an average of 16.9 percent. The sharper downturn in Robusta is attributed to improved supply availability — Robusta green bean exports rose 16.7 percent in the first half of 2025/26 — and a 4.5 percentage point increase in its share of total green exports.

Key takeaway: The market has largely priced in the war, while fundamentals (supply and demand) are now driving prices downward. The I‑CIP dropped 2.7% in April, compared to a 2.3% increase in March when geopolitical fears dominated.

Price performance by group and futures markets

The Colombian Milds and Other Milds both contracted by 0.9 percent in April, averaging 334.56 and 331.32 US cents/lb respectively. Brazilian Naturals fell 2.1 percent to 313.76 US cents/lb. Robusta declined 6.9 percent to 164.64 US cents/lb. At the futures level, the London ICE Robusta market dropped 7.0 percent to 150.65 US cents/lb, while New York ICE Arabica fell 1.9 percent to 284.63 US cents/lb.

IndicatorMarch 2026April 2026ChangeICO Composite (US cents/lb)273.70266.29-2.7%Colombian Milds337.45334.52-0.9%Other Milds334.34331.52-0.8%Brazilian Naturals320.51314.29-1.9%Robustas176.77164.17-7.1%New York ICE (Arabica)290.18284.75-1.9%London ICE (Robusta)161.91150.19-7.2%

Strait of Hormuz blockage: a lasting impact on input costs

Since 4 March 2026, shipping flows through the Strait of Hormuz have remained disrupted. Around one‑fifth of the world’s oil supply passes through this corridor. Between 27 February and 30 April, Brent crude rose from US$73.23/bbl to US$114.09/bbl, an increase of 55.8 percent. The Containerized Freight Index climbed from 1,331.1 to 1,911.4 points, a 43.6 percent rise. Fertilizer urea price jumped 47 percent from US$465/t to US$682/t over the same two‑month period. The Gulf region is a major fertilizer producer; Qatar Fertiliser Company alone accounts for about 14 percent of global urea production. The ICO notes that the increase in urea prices will hit high‑input coffee origins most severely, especially producers who have not secured fertilizers in advance for the main nitrogen application period supporting flowering for the next harvest.

Global supply outlook improves – market forecasts point to larger crops

Throughout March and April, several market players released optimistic projections. On 18 March, Scaufina projected Brazil’s 2026/27 crop to be up 15.5 percent year‑on‑year. On 19 March, Marex Group projected a 14.3 percent increase. On 2 April, StoneX projected global 2026 production at 182.5 million bags, an increase of 9.6 percent over the previous year, and forecast world stocks to rise to 48.2 million bags from 38.3 million in 2025.

These fundamentals gained the upper hand in April, as the market appeared to have already factored in the war. The I‑CIP’s 2.7 percent decline reversed the 2.3 percent increase seen in March, when geopolitical shocks dominated.

Price differentials and arbitrage

The Colombian Milds–Other Milds differential widened slightly from 3.12 to 3.34 US cents/lb. The Colombian Milds–Brazilian Naturals differential grew 22.7 percent to 20.8 US cents/lb. The arbitrage between New York and London futures markets increased 4.5 percent to 133.99 US cents/lb in April, the second consecutive monthly increase. The arbitrage ratio (New York/London) stood at 1.89, above the historical average of 1.75 (January 2018 to May 2025). The ratio has remained above the historic average for 11 of the past 12 months, indicating a return to more typical arbitrage levels.

Volatility declines across all indicators

Intra‑day volatility of the I‑CIP averaged 9.0 percent in April, down 0.8 percentage points from March. Colombian Milds volatility fell to 8.5 percent, Other Milds to 8.8 percent, Brazilian Naturals to 9.7 percent, and Robustas to 10.7 percent. New York futures volatility decreased to 10.0 percent, London to 11.0 percent.

Certified stocks remain at historic lows

London certified Robusta stocks fell 5.5 percent month‑on‑month to 0.65 million bags in April. US certified Arabica stocks dropped 10.1 percent to 0.55 million bags. Stock levels have stabilized in the last six months but remain at historically very low levels. From January 2010 to December 2021, average total ICE stocks were 4.87 million bags. Since the end of 2021, total certified stocks have stayed below 3.0 million bags. Calculated as months of EU and US consumption, current stocks represent just 0.22 months’ worth, compared to an average of 0.91 months between 2010 and 2021.

Green bean exports: mixed performance by group

Global green bean exports in March 2026 rose 0.8 percent to 11.7 million bags. Robusta exports surged 24.0 percent to a record 5.52 million bags, driven by Vietnam (up 30.3 percent to 3.67 million bags) and supported by Brazil and India. Colombian Milds exports fell 33.8 percent to 0.88 million bags, the fifth consecutive monthly decline, as Colombia’s exports dropped 37.4 percent due to falling local supply. Other Milds exports edged up 0.9 percent to 2.59 million bags, led by Honduras (+19.3%). Brazilian Naturals exports declined 16.8 percent to 2.71 million bags, marking the 13th consecutive month of negative growth, driven primarily by Brazil.

Total Arabica exports fell 13.6 percent to 6.18 million bags in March 2026. As a result, Arabica’s share of total green bean exports for the first six months of 2025/26 fell to 59.6 percent from 64.5 percent a year earlier.

Coffee group March 2025 (million bags) March 2026 (million bags) Change
Robustas 4.45 5.52 +24.0%
Colombian Milds 1.33 0.88 -33.8%
Other Milds 2.57 2.59 +0.9%
Brazilian Naturals 3.26 2.71 -16.8%

Total exports by region (all forms of coffee)

Global exports of all forms of coffee increased 1.6 percent to 13.59 million bags in March 2026. Asia & Oceania led growth with a 13.1 percent rise to 5.82 million bags, driven by Vietnam’s 25.1 percent increase to 4.3 million bags – the country’s largest‑ever March export volume and second‑highest monthly volume on record. This was partly offset by Indonesia, whose exports fell an estimated 47.6 percent to 0.45 million bags.

Africa’s exports fell 14.7 percent to 1.4 million bags, led by Ethiopia (down 29.7% to 0.44 million bags). South America’s exports declined 8.3 percent to 4.07 million bags, with Colombia down 28.5 percent to 0.9 million bags – the fourth consecutive monthly downturn. The Caribbean, Mexico & Central America rose 7.1 percent to 2.3 million bags, led by Honduras (+19.3%).

Exports by form: soluble coffee up 6.6%

Green beans accounted for 85.23 percent of total exports in the first half of 2025/26, soluble coffee 14.21 percent, and roasted coffee 0.56 percent. Soluble coffee exports rose 6.6 percent to 1.82 million bags in March 2026, with Vietnam (0.56 million bags), Brazil (0.4 million), and India (0.28 million) as the largest shippers. Roasted bean exports increased 21.0 percent to 0.07 million bags.

Global supply/demand balance

According to ICO data, 2023/24 world production reached 177.5 million bags, up 5.2 percent from the previous year. Arabica production rose 4.5 percent to 102.1 million bags, Robusta 6.2 percent to 75.4 million bags. Consumption in 2023/24 was 175.1 million bags, up 1.4 percent, resulting in a positive balance of 2.44 million bags – the first surplus after three consecutive deficits.

Frequently Asked Questions

  • What was the ICO Composite Indicator Price in April 2026?
The I‑CIP averaged 266.24 US cents per pound, a 2.7 percent decrease from March 2026.
  • How much have Robusta prices fallen since the end of coffee year 2024/25?
Robusta prices have dropped 21.9 percent since the end of coffee year 2024/25, while the I‑CIP fell 18.0 percent and the three Arabica groups declined by an average of 16.9 percent.
  • How did the Strait of Hormuz closure affect shipping and fertilizer costs?
The Containerized Freight Index rose 43.6 percent and urea prices jumped 47 percent between 27 February and 30 April 2026.
  • What are market analysts forecasting for Brazil’s 2026/27 crop?
Scaufina projected a 15.5 percent increase, and Marex Group projected a 14.3 percent increase year‑on‑year.
  • How much green Robusta coffee was exported in March 2026?
Robusta green bean exports reached 5.52 million bags, a 24.0 percent increase from March 2025, the largest ever monthly volume on record.
  • What is the current level of certified stocks compared to historical averages?
Current certified stocks represent just 0.22 months of EU and US consumption, compared to an average of 0.91 months between 2010 and 2021.
Source: International Coffee Organization (ICO) – Coffee Market Report, April 2026 (published May 2026). All figures and analysis are strictly based on the original report. No external data has been added.

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ICO Releases Global Coffee Market Report – December 2025

 

Indonesian Coffee Output Drops 8% to 11.38 Million Bags

Posted on by Qahwa World

Author: Qahwa World – Jakarta
Source: USDA Foreign Agricultural Service – Jakarta Office
Report Number: ID2026-0021
Date: May 15, 2026

Executive Summary
• Indonesian coffee production for MY 2026/27 is forecast at 11.38 million 60-kg bags, down 8% from the previous year.
• Robusta output falls to 10 million bags, a drop of 1 million bags, due to excessive rains in southern Sumatra and Central Java.
• Arabica production for 2025/26 is revised down to 1.37 million bags following Typhoon Sinyar floods in Aceh and North Sumatra.
• Farmgate prices: Robusta down 16% from 2025 peaks; Arabica down 14% since October 2025.
• Exports are forecast at 7 million bags in 2026/27, down 11% due to lower supplies and strong domestic demand.
• European imports of Indonesian coffee jumped 72% to 2.4 million bags in 2025/26.
• Domestic consumption is projected at 4.83 million bags, driven by soluble coffee and the kopi susu trend.
• Some Arabica plantations in Aceh may require 2-3 years to fully recover from flood damage.

1. Overview: Indonesia in the Global Coffee Market

Indonesia is the world’s fourth-largest coffee producer, after Brazil, Vietnam, and Colombia, and ahead of Ethiopia and Uganda. Approximately 75 percent of Indonesian coffee production is exported. Robusta accounts for nearly 88 percent of total output, making Indonesia the largest Robusta producer in Asia and a key supplier to European and US markets.

According to the USDA FAS report from the Jakarta office, Indonesia’s coffee sector faces significant climate-related challenges. Excessive rainfall during the flowering and fruit development phases in late 2025 and early 2026 has severely damaged Robusta crops in southern Sumatra and Central Java. Meanwhile, Arabica-growing areas in Aceh and North Sumatra are still recovering from floods and landslides caused by Typhoon Sinyar in November 2025.

Key insight: Robusta dominates Indonesian coffee production at 88 percent. Smallholders farming 1-2 hectares represent about 98 percent of total coffee area, making the sector highly vulnerable to weather shocks and infrastructure disruptions.

2. Production Forecast: MY 2026/27

FAS Jakarta forecasts Indonesian coffee production for MY 2026/27 at approximately 11.38 million 60-kg bags (682,800 metric tons), comprising 1.38 million bags of Arabica (82,800 tons) and 10.00 million bags of Robusta (600,000 tons). This represents an 8 percent decline from the revised 2025/26 estimate of 12.37 million bags.

Table 1: Indonesian Coffee Production (million 60-kg bags)

Category 2021/22 2022/23 2023/24 2024/25 2025/26 Revised 2026/27 Forecast
Arabica 1.30 1.40 1.40 1.40 1.37 1.38
Robusta 9.30 10.50 6.80 9.30 11.00 10.00
Total 10.60 11.90 8.20 10.70 12.37 11.38

3. Climate Challenges: Rains and Typhoon Damage

The main driver of Indonesia’s production decline is abnormal rainfall during flowering and fruit development. In mid-2025, excessive rains disrupted Robusta flowering in the southern Sumatra highlands. In Central Java, farmers reported heavy rains that caused flowers to drop and pollen to wash away, interrupting pollination and reducing fruit set.

In Aceh and North Sumatra, Arabica areas continue to suffer from flooding caused by Typhoon Sinyar in late November 2025. As of April 2026, infrastructure recovery remains incomplete, keeping transport costs high. Several processing facilities and warehouses were also damaged. Some Arabica plantations may need 2-3 years to recover. The main harvest in Aceh, normally from October to November, was delayed into early 2026.

Looking ahead, Indonesia’s National Weather Agency (BMKG) projects that the 2026 dry season will be significantly drier and longer than average due to a weak El Niño expected to strengthen to moderate levels in the second half of 2026. In Sumatra, the dry season will begin in April-May 2026, starting in Aceh and North Sumatra, then spreading to Lampung and South Sumatra, peaking around August 2026. El Niño conditions typically increase drought risk, which can further disrupt flowering.

Table 2: Rainfall Impact on Key Regions (2025-2026)

Region Event Impact Recovery Timeline
Southern Sumatra Highlands Excessive rains (mid-2025) Disrupted Robusta flowering Lower yields in 2026/27
Central Java Heavy rains, pollen washout Poor fruit development Lower harvest expected
Aceh & North Sumatra Typhoon Sinyar floods (Nov 2025) Damaged Arabica farms, destroyed infrastructure 2-3 years

4. Yield Projections

For MY 2026/27, Robusta yields are expected to decline due to rainfall disruptions, though the report did not provide specific yield per hectare figures. Historically, Indonesian Robusta yields remain below one metric ton per hectare and vary significantly by region. Arabica yields in Aceh and North Sumatra are expected to stay low until infrastructure and farms recover.

Adoption of improved, higher-yielding seedlings remains limited because most farmers rely on locally sourced planting material. Government distribution of subsidized seedlings and farmer training programs also remain limited in geographic coverage.

5. Price Dynamics: Decline from 2025 Peaks

Farmgate and spot prices for both Robusta and Arabica have declined significantly from their 2025 highs. According to spot price data from Lampung (Robusta) and Medan (Arabica), prices have moderated due to improved global supply expectations and weaker demand from some roasteries.

Robusta spot prices in Lampung peaked above 104,000 IDR/kg in February 2025 but fell to around 66,661 IDR/kg by April 2026, a drop of roughly 36 percent from the peak. Year-on-year (April 2025 to April 2026), Robusta prices fell 32 percent. Compared to October 2025 (84,128 IDR/kg), the decline is about 21 percent.

Arabica spot prices in Medan peaked above 229,835 IDR/kg in November 2025 but fell to around 174,162 IDR/kg by April 2026, a drop of roughly 24 percent from the peak. Compared to October 2025 (219,802 IDR/kg), the decline is about 21 percent.

Table 3: Robusta Spot Prices in Lampung (IDR/kg) – Selected Months

Month 2024 2025 2026 Change (Oct 2025 to Apr 2026)
January 56,069 94,724 78,595 -21%
February 55,854 104,371 70,862
March 59,018 102,373 69,785
April 72,712 98,659 66,661

6. Export Outlook: Lower Supplies, Stronger European Demand

FAS forecasts green bean exports for 2026/27 at 7 million bags, down 11 percent from 2025/26, due to lower exportable supplies and continued strong domestic demand. Total exports (including roasted and soluble) are forecast at 8.05 million bags.

Despite the overall decline, shipments to European markets rose 72 percent to 2.4 million bags in 2025/26 compared to the previous year. This reflects renewed demand for Indonesian beans, particularly from Belgium and Germany, supported by recovered supplies, competitive pricing, and EUDR compliance readiness.

The United States remains among Indonesia’s top five destinations, with steady demand between 680,000 and 950,000 bags over the past five years. In 2025/26, shipments to the US ranked third at 797,000 bags. These shipments typically consist of 60-80 percent Arabica beans, mostly exported through the Port of Belawan in North Sumatra.

Table 4: Indonesian Green Bean Exports by Destination (1,000 60-kg bags, 2025/26)

Rank Destination Volume (1,000 bags) Share
1 Europe (total) 2,400 ~30%
2 United States 797 ~10%
3 Others ~3,800 ~60%

7. Trade Agreements and Policy Environment

Unlike India, Indonesia has no newly ratified free trade agreements specifically targeting coffee exports to Europe. However, the country continues to benefit from existing Generalized System of Preferences (GSP) facilities. Exporters have reported higher freight costs and shipping delays linked to the Middle East conflict in the last quarter of 2025/26, which affected some shipments.

Rupiah depreciation against the US dollar supported stronger demand toward the end of 2025/26. Prices for lower-grade Arabica strengthened through March 2026 as access improved, though transport costs reportedly doubled in affected areas.

8. Domestic Consumption: A Growing Market

FAS forecasts domestic consumption for 2026/27 at 4.83 million bags (289,800 metric tons), up 20,000 bags from the previous year, supported by continued demand from roasteries and processors. Local roasteries have faced squeezed margins as green bean prices rose since 2024, and weaker purchasing power in 2025/26 shifted some demand toward low- to medium-grade coffee. With green bean prices easing in early 2026, demand from roasteries should remain strong.

At the consumer level, low-priced coffee sold by street vendors remains popular among workers and low- to middle-income consumers. Coffee outlets in public venues serve higher-end consumers, including Gen-Z. Kopi susu (coffee with milk) remains a popular entry-level drink, widely available in coffee shops and ready-to-drink products.

Table 5: Indonesian Domestic Consumption (million 60-kg bags)

Category 2024/25 2025/26 2026/27 Forecast
Roast & Ground Domestic 3.343 3.270 3.280
Soluble Domestic 1.530 1.540 1.550
Total Domestic Consumption 4.873 4.810 4.830

9. Long-Term Vision and Recovery Outlook

Indonesia has no publicly stated long-term production target comparable to India’s 2047 vision. However, the government and the Coffee Board of Indonesia (under the Ministry of Agriculture) have promoted sustainability programs and EUDR compliance support. The BMKG’s El Niño forecast for the second half of 2026 poses additional risks. Recovery for Arabica plantations in Aceh is expected to take 2-3 years, while Robusta areas may rebound in 2027/28 if normal rainfall returns.

10. Imports: Filling the Gap

FAS forecasts green bean imports for 2026/27 at 1.42 million bags (85,200 metric tons), up slightly from 1.415 million bags in 2025/26. Indonesian green bean imports are closely tied to production and local demand, jumping from around 230,000 bags in 2020/21 to a peak of 942,000 bags in 2023/24, then dropping to around 372,000 bags in 2025/26. The 2023/24 spike reflects weak domestic supply and strong demand for specialty beans and the growing ready-to-drink sector.

Green beans account for approximately 94 percent of total imports and are primarily sourced from Nicaragua, Vietnam, Brazil, and Kenya for processing and re-export.

11. Key Challenges Facing Indonesian Coffee Sector

  • Climate variability: Excessive rains during flowering (mid-2025) followed by El Niño drought (late 2026) create extreme weather shocks.
  • Infrastructure damage: Typhoon Sinyar destroyed roads, bridges, processing facilities, and warehouses in Aceh and North Sumatra. Recovery remains incomplete as of April 2026.
  • Smallholder vulnerability: 98 percent of coffee area is farmed by smallholders with limited access to credit, improved seedlings, or crop insurance.
  • Fertilizer costs: Rising input costs and fertilizer supply uncertainty continue to pressure farmer margins.
  • Freight disruptions: The Middle East conflict has increased shipping costs and caused delays, affecting export competitiveness.
  • Limited replanting programs: No major replanting or expansion programs have been implemented recently, leaving aging trees in place.

12. Opportunities

  • EUDR preparedness: Indonesian exporters have prepared for EU deforestation regulations, potentially gaining market share in Europe.
  • Growing domestic market: Rising coffee culture among Gen-Z and the popularity of kopi susu and ready-to-drink products.
  • Soluble coffee demand: Domestic soluble consumption is projected to remain strong at 1.55 million bags.
  • Rupiah depreciation: A weaker rupiah supports export competitiveness despite lower prices.
  • Recovery potential: Once infrastructure is rebuilt and rainfall normalizes, Indonesian Robusta production can rebound quickly.

Frequently Asked Questions

  • How much coffee will Indonesia produce in 2026/27?

According to the USDA FAS report, Indonesia is forecast to produce 11.38 million 60-kg bags (approximately 682,800 metric tons) in MY 2026/27, comprising 1.38 million bags of Arabica and 10.00 million bags of Robusta. This is an 8 percent decrease from the previous year.

  • Why is Robusta production expected to decline?

Robusta production is projected to fall by 1 million bags (to 10 million bags) due to excessive rains in mid-2025 that disrupted flowering in southern Sumatra highlands and heavy rains in Central Java that caused flowers to drop and pollen to wash away, interrupting pollination.

  • What happened to Arabica production in Aceh and North Sumatra?

Typhoon Sinyar in late November 2025 caused severe floods and landslides, damaging Arabica plantations, processing facilities, and infrastructure. Recovery is expected to take 2-3 years. The main harvest in Aceh was delayed into early 2026.

  • How have coffee prices changed in Indonesia?

Robusta spot prices in Lampung fell from a peak above 104,000 IDR/kg in February 2025 to around 66,661 IDR/kg in April 2026 (down 36% from peak). Arabica spot prices in Medan fell from above 229,835 IDR/kg in November 2025 to around 174,162 IDR/kg in April 2026 (down 24% from peak).

  • What are Indonesia’s main coffee export markets?

Europe is the largest destination, with shipments rising 72 percent to 2.4 million bags in 2025/26, led by Belgium and Germany. The United States ranks third at 797,000 bags. Other markets include Japan, Canada, and the Middle East.

  • How much coffee does Indonesia consume domestically?

Domestic consumption is forecast at 4.83 million bags in 2026/27, with soluble coffee accounting for about 1.55 million bags. Kopi susu (coffee with milk) remains a popular entry-level drink.

Author: Qahwa World – Jakarta
Source: USDA Foreign Agricultural Service – Report ID2026-0021
Date: May 15, 2026
Report Availability: The full USDA report can be accessed through the USDA PSD Online Advanced Query system.

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How Switzerland Became the World’s Second Largest Coffee Exporter?

Posted on by Qahwa World
Author: Coffee World
Source: Swissinfo
Date: May 16, 2026

Executive Summary:

  • Switzerland ranks second globally in coffee exports, with an annual value of 3.3 billion Swiss francs ($4.2 billion).
  • Green coffee enters Switzerland at $5 per kilogram, and after roasting, its value jumps to $26.80 per kilo.
  • Coffee accounts for 33% of Swiss agricultural exports, surpassing cheese and chocolate.
  • A legal concept called “substantial transformation” allows Switzerland to label roasted coffee as Swiss-made.
  • Swiss companies produce about 70% of all fully automatic coffee machines sold worldwide.
  • An estimated 60–70% of the global green coffee trade passes through Swiss trading desks.
  • The success of capsule coffee systems, especially Nespresso, boosted Swiss exports sharply from the early 2000s.

Switzerland has achieved an economic miracle that defies logic. Despite being a small country with a climate unsuitable for growing coffee, it has become the world’s second largest coffee exporter. Only Brazil exports more. According to recent figures, Switzerland ships coffee worth about 3.3 billion Swiss francs ($4.2 billion) annually, outpacing giants like Colombia, Ethiopia, and Vietnam all of which actually grow coffee.

The secret lies in processing, not farming. Switzerland imports green (unroasted) coffee beans from producing nations, then roasts and packages them locally. International trade rules consider roasting a “substantial transformation.” This legal nuance allows Swiss companies to label the final product as Swiss-made, even though the beans came from elsewhere.

From $5 to $26.80: The Value-Add of Roasting

According to the Swiss Trade Monitor from the University of St. Gallen, green coffee enters Switzerland at an average price of $5 per kilogram. After local roasting plants process the beans, their export value reaches $26.80 per kilo. This massive increase makes coffee Switzerland’s most important agricultural export today. With a share of around 33%, coffee even surpasses traditional exports such as cheese and chocolate.

In terms of pure export volume, Switzerland lags slightly behind Italy and Germany. However, its specialization in high-priced, portioned products such as capsules explains why it leads these countries in total export value.

‘Substantial Transformation’: The Legal Trick Behind the Success

Why is coffee that is only roasted in Switzerland allowed to carry a Swiss cross on its packaging? The answer is a legal finesse called “substantial transformation.” Under international trade law, a product’s country of origin is the nation where the product underwent its last substantial transformation. For coffee, customs authorities worldwide have ruled that roasting green beans qualifies as such a transformation. This subtlety has turned Switzerland into one of the world’s largest coffee-producing countries—without a single coffee plantation on its soil.

Nearly all green coffee arrives via the Rhine River. Beans first reach seaports such as Antwerp, Rotterdam, or Hamburg. Barges then transport them up the Rhine to Basel, where many large green coffee trading companies have set up their headquarters.

‘Coffee Valley’ and Global Leadership in Coffee Machines

Around Lake Geneva and in eastern Switzerland, entire ecosystems have developed. Experts often call this region “Coffee Valley.” It hosts not only giants like Nestlé (with Nescafé and Nespresso) but also the industry’s technology leaders.

Switzerland is the undisputed leader in the market for fully automatic coffee machines. About 70% of all such machines sold worldwide come from Switzerland. Leading manufacturers include Jura, Schaerer, and Thermoplan. Thermoplan, for example, supplies all coffee machines for Starbucks branches worldwide. Swiss suppliers of highly specialized precision components also drive this success. These plastic parts must withstand extreme pressures of up to 20 bar and temperatures of 100°C—essential for brewing fine espresso.

Switzerland as a Global Green Coffee Trading Hub

Switzerland’s role as a commodity trading center also explains its coffee dominance. According to the Swiss Trade Monitor, an estimated 60% to 70% of the global green coffee trade passes through Swiss desks. In addition, more than 40 members of the Swiss Coffee Trade Association control over half of all green coffee traded worldwide.

Export figures jumped sharply from the early 2000s onward, largely due to the success of capsule systems. Market leader Nespresso produces its capsules for the global market exclusively in three Swiss factories. Switzerland is also a major exporter of instant coffee and other highly processed specialties positioned in premium segments worldwide.

Key Data: Switzerland and the Global Coffee Trade

Indicator Value
Switzerland’s global coffee export rank Second (after Brazil)
Annual coffee export value 3.3 billion CHF ($4.2 billion)
Green coffee import price (per kg) $5.00
Roasted coffee export price (per kg) $26.80
Coffee’s share of Swiss agricultural exports 33%
Global market share of Swiss automatic coffee machines 70%
Estimated global green coffee trade via Swiss desks 60–70%

The Dark Side: Colonial Roots and Ethical Challenges

Any celebration of Switzerland’s coffee success must acknowledge the industry’s colonial origins. Although Switzerland never had its own colonies, prominent Swiss families owned coffee plantations. The Escher family, for example, owned a coffee plantation in Cuba. According to historical records, slaves guarded by dogs worked there for 14 hours a day. Some Swiss families were also deeply involved in transporting slaves and coffee—a practice researchers call “triangular business.”

Today, the industry still struggles with its image. Ecological and social problems persist in coffee-growing countries. After the European Union enacted a regulation on deforestation-free products, Switzerland launched the Swiss Platform for Sustainable Coffee. Targeted projects aim to improve living conditions for small farmers and make supply chains more transparent. However, critics doubt the platform’s success. They note that the model relies on voluntary action rather than binding legal obligations.

Therefore, the final chapter of the Swiss coffee saga remains unwritten. Global interdependencies continue to draw criticism, and sustainability challenges await stricter, more effective solutions.

Frequently Asked Questions (FAQ)

1. How does Switzerland export coffee without growing it?

Switzerland imports green coffee beans from producing countries, then roasts and processes them locally. Under international trade law, roasting counts as “substantial transformation,” allowing Swiss origin labeling.

2. What is the annual value of Swiss coffee exports?

Switzerland exports coffee worth about 3.3 billion Swiss francs ($4.2 billion) per year, making it the world’s second largest exporter after Brazil.

3. What share of the global coffee machine market does Switzerland hold?

Swiss companies produce approximately 70% of all fully automatic coffee machines sold worldwide, led by Jura, Schaerer, and Thermoplan.

4. What is “Coffee Valley” in Switzerland?

“Coffee Valley” refers to the ecosystem around Lake Geneva and eastern Switzerland, where major companies like Nestlé (Nespresso, Nescafé) and coffee machine technology leaders are based.

5. What criticisms does the Swiss coffee industry face?

Critics point to colonial-era roots (Swiss-owned plantations using slave labor) and ongoing environmental and social issues in producing countries. They also argue that Switzerland’s sustainability model is voluntary, not legally binding.

6. How did capsule coffee boost Swiss exports?

Nespresso produces all its capsules exclusively in three Swiss factories. The success of capsule systems from the early 2000s sharply increased Swiss coffee exports, especially in high-value product categories.

Coffee World – Report based on data from Swissinfo.ch, University of St. Gallen’s Swiss Trade Monitor, and the Swiss Coffee Trade Association.
Published: May 16, 2026 | Figures subject to updates based on latest official releases.

USDA Report: India’s Coffee Sector Faces Climate Challenges and Historic Trade Opportunities

Posted on by Qahwa World
Author: Qahwa World – Dubai
Source: USDA Foreign Agricultural Service (FAS) – New Delhi Office
Report Number: IN2026-0026
Date: May 13, 2026
Executive Summary

  • India MY 2026/27 coffee production forecast at 6.14 million 60-kg bags
  • Arabica yields expected to decline 8% due to excessive rainfall followed by extended dry spell
  • Farmgate prices for Arabica down 16%, Robusta down 11% since October 2025
  • New free trade agreements with UK and EFTA countries offer zero tariffs on Indian coffee exports
  • Domestic consumption projected at 1.58 million bags, driven by soluble coffee demand
  • India aims to reach 900,000 metric tons production by 2047

1. Overview: India’s Position in Global Coffee Market

India ranks as the world’s seventh-largest coffee producer, after Brazil, Vietnam, Colombia, Indonesia, Ethiopia, and Uganda. Approximately 95 percent of India’s coffee production is exported, with green coffee accounting for about 59 percent of total exports and instant (soluble) coffee making up the remaining 41 percent.

According to the USDA Foreign Agricultural Service report from the New Delhi office, India’s coffee sector is at a critical juncture. The country faces climate-related production challenges while simultaneously gaining unprecedented access to European markets through newly ratified free trade agreements.

Key Insight: India’s coffee production comprises approximately one-third Arabica and two-thirds Robusta, with Robusta accounting for over 75% of total output due to its greater resilience to weather variability.

2. Production Forecast: MY 2026/27

FAS Mumbai forecasts India’s MY 2026/27 coffee production at approximately 368,400 metric tons, or about 6.14 million 60-kilogram bags, comprising 1.56 million 60-kg bags of Arabica (93,600 metric tons) and 4.58 million 60-kg bags of Robusta (274,800 metric tons).

📊 Figure 1: India Production Trend
Source: USDA/FAS (Chart data described below)
Figure 1: India coffee production has grown at a CAGR of 2.05% between MY 2021/22 and MY 2024/25

Production Data Table

Table 1: India Coffee Production Forecast (1000 60-kg bags)
Category MY 2024/25 (Actual) MY 2025/26 (Estimate) MY 2026/27 (Forecast)
Arabica Production 1,762 1,730 1,560
Robusta Production 4,297 4,700 4,580
Total Production 6,059 6,430 6,140

3. Climate Challenges: The Threat to Arabica

The India Meteorological Department’s first long-range outlook for the 2026 southwest monsoon indicates below-normal rainfall at about 92 percent of the long-period average, with a 66 percent probability of below-normal to deficit conditions.

Arabica output is expected to decline due to below-normal monsoon rainfall combined with unusually high temperatures, which may adversely affect flowering and fruit set. In contrast, Robusta production is projected to remain relatively strong, reflecting its greater resilience to weather variability.

Rainfall Data for Coffee Growing Regions

Table 2: Rainfall Statistics for Karnataka and Kerala (January – April 2026)
State/District Winter (Jan-Feb) Departure Pre-Monsoon (Mar-Apr) Departure
Chikmagalur (Karnataka) Large Excess (+244%) Normal (-17%)
Kodagu (Karnataka) Large Excess (+177%) Normal (-7%)
Wayanad (Kerala) Large Excess (+235%) Deficit (-48%)
Travancore (Kerala) Excess (+48%) Deficit (-53%)

The data reveals a stark pattern: excessive winter rainfall (January-February) followed by deficit pre-monsoon rains (March-April). This extreme weather variability – from flooding to drought within weeks – is precisely the type of climate shock that most damages coffee flowering and fruit set, particularly for the more sensitive Arabica variety.

4. Yield Projections

For MY 2026/27, Arabica yields are projected to decline by eight percent year-on-year to 452 kilograms per hectare, while Robusta yields are expected to fall marginally by two percent to 1,239 kilograms per hectare, although still above the three-year average.

Table 3: Coffee Yield Comparison (kg per hectare)
Coffee Type MY 2026/27 Forecast 3-Year Average (2022-2024) Change
Arabica 452 475 -8%
Robusta 1,239 1,156 +7% (above average)
Why Robusta Outperforms: Robusta yields remain about 2.3 times higher than Arabica, reflecting its greater resilience and productivity. Arabica is more sensitive to altitude, pest, and climate variability, requiring more precise growing conditions.

5. Price Dynamics: Decline from Record Highs

Farmgate prices for Arabica and Robusta have declined by 16 percent and 11 percent respectively since October 2025. Despite this change, prices remain at a premium to other origins, though further moderation is expected. The decline in prices is being driven by expectations of higher output in key producing countries and elevated domestic stock levels.

📊 Figure 2: Farmgate Raw Coffee Prices in Karnataka
Exchange rate: Rupees 92.99 per US dollar (as of April 20, 2026)
Source: Coffee Board of India
Figure 2: Indian coffee prices have moderated but still trade at premium to competing origins

6. Export Outlook: Trade Agreements Transform Market Access

Post forecasts that MY 2026/27 coffee exports will rise by three percent to 6.22 million bags (373,140 metric tons), driven by higher exportable surplus and strong demand for soluble coffee exports.

New Free Trade Agreements

Table 4: New Trade Agreements Benefiting Indian Coffee Exports
Agreement Partner Countries Benefit for Coffee Effective Date
India-UK CETA United Kingdom Zero duty on roast, ground, and instant coffee Recently concluded
India-EFTA TEPA Switzerland, Norway, Iceland Zero percent duty on all coffee exports October 1, 2025

The United Kingdom currently accounts for 1.7 percent of India’s coffee exports, while the EFTA countries (Switzerland, Norway, Iceland) offer new zero-tariff access. Europe has emerged as a more stable trading partner with increased inquiries. Italy remains the top destination, using almost 60 percent of imported Indian coffee domestically while 40 percent is processed for private label manufacturers for re-exports.

Export Destinations

📊 Figure 3: Coffee Export Share by Country (percentage)
Italy leads, followed by Germany, Russia, Belgium, and UAE
Source: Trade Data Monitor, LLC
Figure 3: Indian coffee exported to more than 125 countries, with 61% of shipments from Mangalore port

7. Export Challenges: Premium Prices and Freight Costs

Despite positive momentum, several challenges exist. Indian coffee prices are significantly higher than competing origins from Vietnam and Indonesia. High premiums could pose challenges to exports despite recent prices being lower than last year.

Freight costs to the Middle East have surged dramatically, from $700-$1,200 per 20-foot container in January/February to $1,500-$2,800, with occasional short-term spikes higher due to war risk surcharges, insurance costs, and vessel rerouting. Trade data indicates that about 11-12 percent of India’s total coffee exports in green bean equivalent go to the Middle East, the second-largest regional market after Europe (44-45 percent).

8. Domestic Consumption: A Growing Market

Post forecasts MY 2026/27 domestic consumption at 1.58 million 60-kilogram bags (94,800 metric tons), supported by rising demand for soluble coffee. Household consumption of soluble coffee is expected to account for a significantly larger share of domestic consumption, rising to around 73 percent next year.

India’s per capita coffee consumption remains at 0.04 kilograms, well below the global average of 1.3 kilograms, indicating significant growth potential.

Table 5: Domestic Consumption Breakdown (1000 60-kg bags)
Category MY 2024/25 MY 2025/26 MY 2026/27 Forecast
Roast & Ground Domestic 330 415 420
Soluble Domestic 820 1,160 1,160
Total Domestic Consumption 1,150 1,575 1,580

9. Long-Term Vision: India 2047

The Coffee Board of India has set an ambitious long-term target of increasing national coffee production to 900,000 metric tons by 2047, through a combination of productivity gains, area expansion, and value-chain improvements. This includes replanting old and low-yielding bushes with high-yielding, climate-resilient varieties, promoting better agronomic practices (irrigation, pruning, soil health), and expanding cultivation into non-traditional regions.

📊 Figure 4: Monthly Coffee Exports by Volume (October-September)
5-year average vs 2024/25 vs 2025/26
Source: Trade Data Monitor, LLC
Figure 4: Exports in MY 2025/26 (October-January) were 26% higher than the previous year

10. Imports: Filling the Gap

Post forecasts MY 2026/27 imports at 1.39 million 60-kilogram bags (83,400 metric tons). Imports are expected to be four percent higher than last year as the use of Indian coffee in soluble coffee re-exports remains limited due to domestic beans trading at a premium, necessitating higher reliance on imported beans for processing and value addition.

Green beans account for approximately 94 percent of total imports and are primarily sourced from Indonesia, Kenya, Vietnam, Uganda, and Brazil for processing and re-export.

Table 6: India Import Tariff on Coffee Products
HS Code Product Description Standard Rate
0901.11 Coffee not roasted, not decaffeinated 100%
0901.12 Coffee not roasted, decaffeinated 100%
0901.21 Coffee roasted, not decaffeinated 100%
2101.11.20 Instant coffee not flavored 30%

11. Key Challenges Facing Indian Coffee Sector

  • Climate Variability: Excessive rainfall followed by extended dry spells during critical flowering stage
  • Fertilizer Costs: Persistent shortages and rising input costs across the value chain
  • Labor Availability: Coffee production is labor intensive, with nearly 70% of production cost attributable to labor
  • Premium Pricing: Indian coffee prices significantly higher than competing origins from Vietnam and Indonesia
  • Freight Disruptions: Surging shipping costs to Middle East due to geopolitical tensions

12. Opportunities

  • Free Trade Agreements: Zero tariff access to UK, Switzerland, Norway, and Iceland
  • Growing Domestic Market: India’s coffee market projected to grow at 8.9% CAGR by 2028
  • Soluble Coffee Demand: Double-digit growth in domestic soluble coffee consumption
  • Specialty Coffee: Estate branded coffees commanding prices comparable to export levels
  • Youth Demographic: Expanding urban coffee culture and younger consumers driving growth

Frequently Asked Questions

How much coffee will India produce in 2026/27?

According to the USDA FAS report, India is forecast to produce 6.14 million 60-kilogram bags (approximately 368,400 metric tons) in MY 2026/27, comprising 1.56 million bags of Arabica and 4.58 million bags of Robusta.

Why is Arabica production expected to decline?

Arabica yields are projected to decline 8% due to excessive rainfall in January and February 2026 followed by an extended dry spell during the critical flowering and fruiting stage. Arabica is more temperature-sensitive and has higher water requirements compared to Robusta.

What are the new trade agreements benefiting Indian coffee?

The India-UK Comprehensive Economic and Trade Agreement (CETA) offers duty-free access for roast, ground, and instant coffee to the United Kingdom. The India-EFTA Trade and Economic Partnership Agreement (TEPA), effective October 1, 2025, provides zero percent duty on all coffee exports to Switzerland, Norway, and Iceland.

How have coffee prices changed in India?

Farmgate prices for Arabica have declined by 16 percent and Robusta by 11 percent since October 2025. Despite this decline, Indian coffee prices remain at a premium to other origins, though further moderation is expected.

What is India’s long-term coffee production target?

The Coffee Board of India has set an ambitious target of increasing national coffee production to 900,000 metric tons by 2047 through productivity gains, area expansion, replanting with high-yielding varieties, and value-chain improvements.

Who are the main buyers of Indian coffee?

Italy remains the major buyer, followed by Germany, Russia, Belgium, and the United Arab Emirates. Indian coffee is now exported to more than 125 countries, with approximately 61 percent of shipments originating from the Mangalore port in Karnataka.

Author: Qahwa World – Dubai
Source: USDA Foreign Agricultural Service (FAS) – Report IN2026-0026
Date: May 13, 2026
Report Availability: The full USDA report can be accessed through the USDA PSD Online Advanced Query system.

 

European Commission Simplifies Deforestation Regulation.. What’s New?

Posted on by Qahwa World

By Ali Al Zakary – Dubai | May 8, 2026 | 9 min read

European Commission Simplifies Deforestation Regulation (EUDR 2023/1115): Soluble Coffee In, Leather Out, US Demands Rejected

📋 Executive Summary – What’s New in the Simplification?

  • ✅ Micro & small operators (under 10 employees or €2M turnover): exempt from geolocation coordinates (postal address accepted).
  • ✅ Compliance costs reduced by 75% annually.
  • ✅ Soluble coffee (HS 2101 11 00) added to the product scope.
  • ❌ Leather (HS 4101, 4104, 4107) temporarily excluded (subject to review).
  • ❌ US demand rejected: geolocation still mandatory for low-risk countries (non-small operators).
  • 📅 Final deadline unchanged: December 30, 2026.
  • 🇺🇸 US exports at risk: estimated $9 billion annually.

Background and Legal Context

Before diving into the details, it is essential to recall that the European Union Deforestation Regulation (Regulation 2023/1115) was amended in December 2025, following requests from member states and the private sector, after it became clear that the original text was so burdensome as to disrupt supply chains. The amendments mandated the Commission to prepare a “simplification review report” to ensure ease of application before the final deadline, which remains fixed at December 30, 2026. This report is what we discuss today.

The Simplification Package – Four Key Pillars

The Commission did not issue a single report but rather an integrated package of four interconnected elements:

  • Formal Report to the European Parliament and Council: Describes all measures implemented since June 2023 and estimates a reduction in annual compliance costs for companies by 75%.
  • Updated Guidance Document (third edition): Provides practically binding clarifications on the definition of “agricultural use” and the role of certification schemes in risk assessment.
  • Revised Frequently Asked Questions (fifth iteration): Addresses marginal cases such as e-commerce, micro and small primary operators, and alternative geolocation methods.
  • Draft Delegated Act amending the product scope: Proposes the addition of 17 codes, deletion of 3 codes, and replacement of 1 code.

Radical Change in Product Scope – Soluble Coffee In, Leather Out

This was arguably the most anticipated item. The Commission has developed a hybrid methodology to evaluate each product individually, combining quantitative and qualitative assessments.

Soluble coffee (HS 2101 11 00): The report states that its exclusion had created a “fragmented approach” in the coffee sector, whereby an illegal producer could convert beans into soluble coffee to evade scrutiny. This decision now subjects all forms of coffee (beans, roasted, soluble) to the same standards.

Leather (HS 4101, 4104, 4107): This exclusion surprised the global leather industry. The report gives four reasons: differentiation of the leather value chain from meat value chains, asymmetries in trade flows, relatively low economic value of hides compared to meat, and the risk of creating an unbalanced approach because downstream leather goods remain outside the scope. Warning: This exclusion may be reconsidered if evidence of circumvention emerges.

Summary of HS Code Changes

Change Type Number of Codes Examples
✅ Added 17 2101 11 00 (soluble coffee), 0206 21 00 (frozen cattle tongue)
❌ Excluded 3 4101 (raw hides), 4104 (tanned leather), 4107 (finished leather)
🔄 Replaced 1 Retreaded tyres replaced with new rubber treads

New Information System – Grouping Feature and Contingency Plan

  • Simplified declaration form for micro and small operators.
  • Updated APIs for large companies.
  • Detailed contingency plan for system unavailability.
  • Voluntary grouping feature: allows companies to group several due diligence statements into one file.

Operator Categorisation – Three Tiers, Different Obligations

Tier Description Key Obligations
Upstream operators Producers, large exporters Full due diligence, geolocation coordinates, statement per shipment
Micro & small operators Fewer than 10 employees or under €2M turnover One-time simplified declaration, postal address instead of coordinates
Downstream operators & traders Distributors, non-SME retailers Keep partner records, verify only if substantiated concerns exist

Low-Risk Countries – Geolocation Not Waived

This is the provision that caused US frustration. Operators sourcing exclusively from “low-risk” countries benefit from partial simplification under Article 13 of the regulation:

  • ✅ Relieved of risk assessment (Article 10) and risk mitigation (Article 11).
  • ❌ Not relieved of providing geolocation coordinates (unless they are micro/small operators).

Implication for the United States: Even if classified as “low risk” (as recognised by the August 2025 US-EU Framework Agreement), non-small US exporters must still provide geolocation coordinates. Washington has protested this as “burdensome and disproportionate.”

Global Law Repository and Proportionate Evidence

The Commission committed to establishing a central repository of relevant legislation for each producing country, to be ready by December 2026. The repository will cover land use rights, environmental protection, forest-related rules, indigenous peoples’ rights, labour rights, tax, anti-corruption, trade and customs regulations.

Proportionality principle: High-risk supply chains require in-depth, plot-by-plot evidence collection. Areas posing negligible risk (e.g., US, Western Europe) should not be required to systematically collect comprehensive legal documentation.

US Reaction – $9 Billion in Exports at Risk

Washington points out that 36% of US land area (331 million hectares) is forested, and forest carbon stocks increased by 3.6% since 2010. Despite this, US sources estimate that full application of the regulation could negatively affect US agricultural and forestry exports worth up to nine billion dollars annually, including beef, coffee (all forms), cocoa, soybeans, wood, rubber, and derived products.

The August 2025 US-EU Framework Agreement recognised that US production poses negligible risk to global deforestation. However, the May 4, 2026 simplification package contained no response to the core US demand: exempting low-risk countries from geolocation requirements.

Conclusion

In the final analysis, the European simplification package brought:

  • ✅ Good news for micro and small operators (75% cost reduction, postal address option).
  • ❌ Bad news for the global leather industry (temporary exclusion, subject to review).
  • ⚡ Surprise for soluble coffee sector (full inclusion after having been previously excluded).
  • 🚫 No news for exporters from low-risk countries (geolocation mandate remains).

The file remains open for further negotiations before the December 30, 2026 deadline. Will Washington accept this “European disregard” or resort to countermeasures? Only the coming days will tell.

❓ Frequently Asked Questions (FAQ)

Q: Has the deforestation regulation been completely cancelled?
A: No. It has been simplified to reduce burdens on small companies. The final deadline remains December 30, 2026.

Q: How do small companies benefit?
A: Companies with fewer than 10 employees or annual turnover below €2 million submit a one-time simplified declaration and may use a postal address instead of geolocation coordinates.

Q: Is soluble coffee now covered by the regulation?
A: Yes. HS code 2101 11 00 (soluble coffee) has been added to close a loophole that allowed circumvention.

Q: Why was leather excluded?
A: Due to the differentiation of the leather value chain from meat, asymmetrical trade flows, low economic value of hides relative to meat, and risk of imbalance. However, the exclusion is subject to review if circumvention evidence emerges.

Q: Did the simplification satisfy US demands?
A: No. The core US demand — exempting low-risk countries from geolocation requirements — was rejected. US exporters (non-small) still must provide coordinates.

Q: What is the final compliance deadline?
A: December 30, 2026. The simplification changed procedures, not the deadline.

✍️ About the author: Ali Al Zakary – Journalist based in Dubai, specialised in European Union affairs and international environmental legislation. He has been covering the EU Deforestation Regulation (EUDR) since 2023 and has published over 30 reports and analyses on its developments and impact on Arab and global markets.

Sources: European Commission package documents (May 4, 2026), August 2025 US-EU Framework Agreement, US Department of Agriculture forest data (2025).

Vietnam Coffee Exports Rise 16% in Early 2026 While Revenue Falls

Posted on by Qahwa World
Dubai – Qahwa World

Vietnam’s coffee sector recorded a strong increase in export volumes during the first four months of 2026, while total export revenues declined due to easing global prices following the record highs of the previous year.

According to official government data, Vietnam exported approximately 810,000 tons of coffee between January and April 2026, representing a 15.8% year-on-year increase. The rise reflects continued strength in production and logistics, reinforcing Vietnam’s position as the world’s largest robusta coffee producer.

However, despite higher shipment volumes, export revenues fell by 7% compared to the same period in 2025, totaling 3.69 billion dollars. This divergence between volume and value reflects a clear correction in global coffee prices, particularly in the robusta segment.

  • Volume and Value Gap in Market Performance

The latest figures highlight a widening gap between export volume and export value. While shipments increased significantly, the average export price declined to around 4,555 dollars per ton, down from the elevated levels seen in mid-2025.

This price normalization follows a period of tight global supply that previously pushed prices to historic highs. Improved harvest conditions in Vietnam’s Central Highlands and recovering output from other producing countries have eased supply constraints, contributing to softer prices.

  • Market Dynamics and Domestic Trends

The decline in export revenue is primarily linked to weaker global coffee prices as markets adjust to expectations of higher supply. Increased production in Vietnam, along with competitive exports from countries such as Indonesia, has contributed to a more balanced global market.

Domestically, farm-gate prices in key coffee-producing provinces such as Dak Lak and Lam Dong fluctuated between 88,700 and 89,300 Vietnamese dong per kilogram in April. These movements encouraged cautious selling behavior among farmers, who are closely monitoring price trends before releasing stocks.

Earlier in the year, export momentum was already strong. Shipments in January and February 2026 were reported to be up by around 14 percent in some datasets, with the first quarter maintaining solid volume growth despite continued pressure on export values.

  • Strong Crop Outlook Supports Export Growth

Vietnam’s 2025 to 2026 coffee crop is expected to remain strong, with earlier projections indicating a potential increase of around 10 percent compared to the previous season. This growth is supported by improved weather conditions following earlier drought-affected periods.

The favorable production outlook has helped sustain high export volumes and ensured stable supply availability in global markets.

  • Strategic Shift Toward Value Addition

In response to ongoing price volatility in raw coffee markets, Vietnamese authorities and industry stakeholders are accelerating efforts to expand deep processing.

This strategy focuses on increasing exports of roasted, ground, and instant coffee products rather than relying mainly on green bean shipments. Investments are being directed toward advanced processing facilities to strengthen value addition and improve competitiveness in global supply chains.

  • Outlook

Industry analysts expect Vietnam to maintain strong export volumes throughout 2026, potentially reaching near-record levels if current production trends continue. However, revenue growth may remain under pressure unless global prices recover or demand strengthens in key markets such as the European Union, the United States, and Japan.

Vietnam’s performance in early 2026 highlights a key trend in global coffee trade: rising supply is driving higher export volumes, while price normalization is limiting overall export value.

Source: General Statistics Office (GSO) / Ministry of Agriculture and Rural Development