Tag: Coffee Exports

Indonesia Expands Coffee Exports with New Shipment to Saudi Arabia

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JAKARTA – Qahwa World

Indonesia has expanded its coffee export market with a new shipment of premium Arabica beans from the slopes of Mount Argopuro in East Java to Saudi Arabia, marking another milestone for the country’s growing smallholder coffee sector.

The shipment, totaling 15 tons and valued at around 3 billion rupiah (approximately 180,000 U.S. dollars), reflects Indonesia’s continued effort to strengthen its position in the global coffee trade and promote the role of micro, small, and medium enterprises in international markets. The consignment was officially dispatched on Monday, in a move hailed by government officials as a success story for local farmers and entrepreneurs.

Bagus Rachman, Deputy for Business Affairs at Indonesia’s Ministry of Micro, Small, and Medium Enterprises, said the export from Mount Argopuro demonstrates the competitiveness of Indonesian MSMEs on the global stage. He emphasized that more than 90 percent of the nation’s coffee plantations are managed by smallholder farmers, who have become the backbone of Indonesia’s coffee production and export activities. Rachman described the Argopuro shipment as a model of how medium-scale enterprises can become a driving force within the MSME ecosystem, creating added value and expanding export capacity.

According to Statistics Indonesia, the country’s coffee exports rose from 279.94 million kilograms in 2023 to 316.72 million kilograms in 2024, underscoring steady growth despite challenges from fluctuating prices and global demand pressures. East Java, where Mount Argopuro is located, remains one of Indonesia’s key coffee-producing regions, known for high-altitude Arabica beans characterized by their clean cup, moderate acidity, and distinct aroma.

Local officials in Situbondo Regency, the region surrounding Mount Argopuro, praised the export as a breakthrough for community-based farmer groups that have invested in quality improvement and post-harvest processing. They highlighted that Argopuro’s elevation, reaching about 1,800 meters above sea level, contributes to its unique flavor profile, making it increasingly sought after in Middle Eastern and Asian markets. The local government also called for stronger support programs to encourage youth participation in coffee farming and ensure long-term sustainability of production.

Data from Indonesia’s Ministry of Trade shows that the country exported coffee, tea, and related products worth more than 16 million U.S. dollars to Saudi Arabia in 2023. The new shipment from East Java is expected to deepen trade relations between the two nations, opening opportunities for future collaboration in the premium and specialty coffee segments. Saudi Arabia has become an emerging destination for Indonesian agricultural products, reflecting growing demand for high-quality Arabica beans in the region’s expanding coffee industry.

Industry observers say the success of this shipment could inspire similar initiatives across Indonesia’s coffee-growing provinces, including Aceh, North Sumatra, and South Sulawesi, where MSMEs are working to boost exports of specialty varieties. The government’s ongoing push to promote downstream processing, improve logistics, and introduce value-added branding is seen as essential to enhancing Indonesia’s competitiveness in international markets.

Indonesia, the world’s fourth-largest coffee producer, has long been known for its diverse range of beans, from Sumatra Mandheling to Java and Toraja. With global demand for Arabica and Robusta continuing to rise, initiatives like the Argopuro export are expected to help the country expand its share of premium coffee markets, create higher income for farmers, and reinforce Indonesia’s image as a leading origin in the world of coffee.

Global Coffee Market Reacts to Tariffs, Rate Cuts, and EU Regulation Uncertainty

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Dubai – Qahwa World

The global coffee market navigated a turbulent September as trade tensions, monetary policy shifts, and regulatory uncertainty reshaped investor sentiment and price dynamics. According to the International Coffee Organization’s (ICO) latest Coffee Market Report for September 2025, the sector was influenced by a combination of U.S. tariff policy, an interest rate cut by the Federal Reserve, and developments surrounding the European Union’s Deforestation Regulation (EUDR). Together, these factors created a complex environment of both optimism and caution across producing and consuming regions.

The month began with heightened uncertainty following the decision by the United States to maintain its 50% import tariff on coffee. This came despite a presidential executive order, issued on 8 September, that excluded several commodities from the existing tariff regime. Coffee, however, remained absent from the exemption list, as it is not considered a product that can be sufficiently produced within the U.S. to meet domestic demand. The policy stance kept traders and importers on edge, particularly in light of already tight global supplies and rising domestic roasting costs.

The ICO report noted that the continued imposition of tariffs has dampened export momentum from major producing countries, particularly Brazil, which remains the world’s largest coffee supplier. Exporters faced not only the direct cost of tariffs but also indirect consequences such as higher insurance premiums and delayed shipments. The United States, typically the second-largest destination for Brazilian coffee after Germany, saw imports fall sharply in August — down 46% year-on-year and 26% month-on-month, according to data from Cecafé.

However, as the month progressed, a diplomatic thaw between Washington and Brasília offered a glimmer of optimism. Meetings between senior officials from both countries, held on the sidelines of the United Nations General Assembly in New York, were interpreted by market analysts as a potential first step toward resolving trade tensions. Though no formal changes were announced, the dialogue provided reassurance to traders that punitive tariffs might be reviewed later in the year, especially if inflationary pressure continues to ease in the United States.

Adding to the month’s market developments, the U.S. Federal Reserve cut its benchmark interest rate by 25 basis points on 17 September — its first such move since early 2024. The decision aimed to support economic growth amid signs of slowing consumer spending and lower manufacturing output. For coffee traders, the rate cut brought mixed implications. On one hand, cheaper borrowing encouraged speculative activity in commodity markets, which helped lift prices. On the other, the stronger U.S. dollar that followed the announcement increased costs for buyers using other currencies, especially in emerging markets.

The ICO observed that the daily volatility of the ICO Composite Indicator Price (I-CIP) rose to 13.8% in September, up from 11% the previous month, partly driven by the interplay of monetary and trade factors. The organization emphasized that such fluctuations reflect not only speculation but also genuine uncertainty about the future of trade flows and regulatory frameworks that govern the industry.

In Europe, a different kind of uncertainty unfolded. The European Commissioner for Environment, Oceans, and Fisheries, responsible for overseeing the Deforestation Regulation (EUDR), expressed concern over the readiness of the EU’s technical system for tracing commodities such as coffee, cocoa, and palm oil. The Commissioner admitted that the digital platform designed to monitor compliance might not be fully operational in time for the regulation’s official start date in January 2026. As a result, Brussels is now considering a one-year postponement of the EUDR’s implementation.

This potential delay was met with relief from coffee-producing nations and exporters, many of whom have voiced apprehension over the costs and logistical burdens of compliance. The regulation, adopted in 2023, requires companies importing into the EU to prove that their products do not contribute to deforestation or forest degradation. For coffee, that means exporters must provide precise geolocation data for every farm and ensure traceability across the supply chain. While the regulation aims to promote sustainable trade, several producing countries, including Ethiopia, Uganda, and Honduras, have warned that smaller farmers could be excluded from the European market if compliance deadlines remain too strict.

Market participants see the proposed delay as a temporary reprieve. “It gives exporters and cooperatives valuable time to adjust and strengthen traceability systems,” the ICO noted. However, the organization also cautioned that postponement does not remove the long-term challenge of compliance. Producers who fail to invest in sustainable certification and farm-level data systems risk losing access to the world’s most regulated and high-value coffee market.

By the end of September, the combined effects of tariffs, monetary easing, and policy uncertainty continued to shape market sentiment. The ICO Composite Indicator Price averaged 324.62 US cents per pound, up 9.3% from August, marking the highest level in two years. Yet, behind the price surge lay diverging regional realities: while exporters in Vietnam and Colombia benefited from strong demand and competitive logistics, producers in Brazil and Central America faced rising export costs and political tension around trade access.

The report concluded that these intersecting economic and regulatory developments have pushed the coffee industry into a phase of structural adaptation. With monetary policy softening in the United States, trade negotiations cautiously reopening, and the EU potentially adjusting its sustainability timeline, the final quarter of 2025 is expected to test the industry’s resilience. Analysts agree that while prices may remain high in the short term, long-term stability will depend on how swiftly producers, traders, and regulators can align under a more predictable and sustainable framework.

As the ICO noted, the coffee market of late 2025 is no longer defined solely by supply and demand but by the policies, regulations, and economic instruments that govern it. The cup of coffee on the global stage has never been more entangled with diplomacy, finance, and environmental accountability.

Global Coffee Prices Surge to 2-Year High

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Dubai – Qahwa World

The global coffee market witnessed a significant price surge in September 2025, marking one of the strongest monthly performances in recent years. According to the latest Coffee Market Report issued by the International Coffee Organization (ICO), the ICO Composite Indicator Price (I-CIP) averaged 324.62 US cents per pound, representing a 9.3% increase compared to August 2025 and a striking 25.4% rise year-on-year. The report reveals that while prices rose across all coffee groups, tightening certified stocks and persistent trade uncertainties continue to define the market’s volatile landscape.

The ICO noted that Arabica varieties led the monthly increase, with Colombian Milds climbing 10.1% to 403.77 US cents/lb, Other Milds advancing 9.3% to 400.21 US cents/lb, and Brazilian Naturals gaining 11.3% to 374.91 US cents/lb. Robusta, meanwhile, registered a more moderate yet notable 5.9% increase to 210.85 US cents/lb. The rise was mirrored on both major futures exchanges, with New York ICE prices up 11.5% to 366.31 US cents/lb, and London ICE prices increasing by 8.9% to 197.56 US cents/lb. The I-CIP fluctuated between 298.14 and 360.74 US cents/lb during the month, maintaining a median value of 323.44.

The report attributes much of September’s price escalation to several interconnected macroeconomic and policy-related developments that placed upward pressure on the market during the first half of the month. Among these, concerns over the long-term supply of coffee to the United States stood out, especially given the continued uncertainty surrounding import tariffs. Although on 8 September the U.S. administration issued an executive order revising tariffs for “aligned partners” with established trade agreements, coffee remained excluded from the list. The commodity continues to face a 50% import tariff imposed earlier in the year, as it is not yet categorized among products that the U.S. cannot sufficiently produce domestically. This policy has led to sustained apprehension among traders and exporters, particularly as U.S. certified Arabica stocks continue to decline.

The ICO underlined that certified stocks—used as a short-term substitute for coffee imports—are shrinking at an alarming rate, reinforcing market tightness. U.S. certified stocks of Arabica fell 19.3% in September to 0.66 million 60-kilogram bags, while London-certified Robusta stocks decreased 4.3% to 1.08 million bags. These drawdowns, the report states, indicate that the market is “starting to feel the squeeze,” signaling a bullish outlook for prices if replenishment remains weak.

However, the latter half of September brought developments that introduced downward pressure and tempered speculative enthusiasm. On 15 and 17 September, the ICE Futures U.S. exchange raised margin requirements for Arabica contracts twice in a single week. Higher margin requirements force investors to deposit more capital with brokers to cover increased credit risk, thus raising borrowing costs for both new and existing positions. The ICO explained that such moves can reduce liquidity and limit speculative demand, potentially stabilizing prices in overheated markets.

At the same time, discussions at the United Nations General Assembly between U.S. and Brazilian officials provided a momentary boost to market optimism. As the world’s largest coffee producer and the largest destination market sought to improve bilateral trade relations, investors interpreted the talks as a signal that tariff détente might eventually follow. Brazil’s exports have been under severe strain, declining for ten consecutive months due to both cyclical production factors and logistical issues at the port of Santos.

On the monetary front, the U.S. Federal Reserve’s 25-basis-point interest rate cut on 17 September had a nuanced impact. While the policy was intended to lower borrowing costs across the economy, it indirectly affected coffee prices by making speculative trading less expensive. The ICO noted that cheaper credit may have helped sustain trading volumes, adding volatility to a market already under pressure from tightening supplies.

The European Union also entered the spotlight in September after the EU Commissioner for Environment, Water Resilience and a Competitive Circular Economy raised concerns over the readiness of the EU Deforestation Regulation (EUDR) IT system. The Commissioner indicated that the system might not be able to handle the expected transaction volume, suggesting a possible one-year extension before enforcement begins. The EUDR, which aims to ensure that coffee and other commodities imported into the EU are deforestation-free, has been a major topic of concern among exporters since its adoption, and any delay could temporarily ease compliance-related pressures on coffee-producing nations.

Despite these counterbalancing developments, overall volatility continued to rise. The ICO reported that intra-day volatility of the I-CIP increased by 2.8 percentage points compared to August, averaging 13.8% in September. By category, Colombian Milds and Other Milds showed volatility of 14.0% and 13.7%, respectively, Brazilian Naturals 14.7%, and Robustas 15.0%. At the futures level, New York volatility stood at 15.2%, while London measured 16.2%, reflecting a minor uptick in speculative activity.

Price differentials also widened notably. The Colombian Milds–Other Milds differential expanded from 0.41 to 3.56 US cents/lb, while the Colombian Milds–Robustas differential rose 15.1% to 192.92 US cents/lb. The arbitrage between the London and New York markets, a key indicator of the spread between Arabica and Robusta, widened by 14.7% to 168.75 US cents/lb, the highest level of the year.

Overall, the ICO described September as a month defined by tightening supplies, speculative activity, and geopolitical uncertainty. The consistent decline in certified stocks, combined with unresolved tariff tensions and potential EUDR delays, continues to reinforce a bullish sentiment across the market. As the fourth quarter of 2025 begins, analysts expect coffee prices to remain elevated, with volatility likely to persist until structural issues—such as logistics bottlenecks, regulatory clarity, and weather-related production concerns—are addressed.

In summary, the ICO’s latest data depict a coffee market under strain but also opportunity. Prices are buoyed by constrained supply and investor sentiment, while trade policies and financial dynamics continue to influence short-term movements. With the I-CIP climbing above 320 US cents/lb for the first time in over two years and certified stocks hitting new lows, September 2025 may well be remembered as a turning point in the evolving balance between global coffee supply and demand.

Brazil Set to Overtake Vietnam as the World’s Largest Robusta Coffee Producer

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Dubai – Qahwa World

Brazil is on track to surpass Vietnam as the world’s leading producer of robusta coffee, according to a new report by Dutch bank Rabobank. The report highlights Brazil’s growing advantage due to robusta’s resilience to heat, drought, and disease — key traits as climate change increasingly threatens arabica production.

Rabobank estimates Brazil’s robusta output will reach 24.7 million 60-kg bags in 2025, up from 19 million bags in 2020. Meanwhile, Vietnam is projected to produce around 30 million bags in 2025/26, according to the U.S. Department of Agriculture.

Unlike arabica, which offers a milder flavor and is favored by premium brands such as Starbucks and Nespresso, robusta has a stronger taste and higher caffeine content. It is mainly used in instant coffee, espresso blends, and iced beverages.

Over the past five decades, temperatures in Brazil’s key coffee regions have risen by 1.3 to 1.6°C, while rainfall has decreased by up to 211 millimeters. To adapt, Brazilian farmers have increasingly relied on irrigation — now covering 71% of robusta farms — with this figure projected to reach 363,800 hectares by 2040.

Although the initial investment in robusta plantations is high (around $15,700 per hectare), its productivity is 170% higher per hectare than arabica, enabling cost recovery in about four years, Rabobank said.

The report also noted that Brazil has about 28 million hectares of degraded pastureland suitable for deforestation-free agricultural expansion, creating significant room for robusta growth.

Additionally, the EU’s exemption of instant coffee from deforestation regulations could boost global demand for robusta-based products, further accelerating Brazil’s rise in production.

August Export and Market Update

In August 2025, Brazil exported 3.1 million bags (60kg) of coffee — down 17.5% year-on-year (YOY) but up 14.3% compared to July, according to data from Cecafé. Despite the monthly recovery, exporters continue to face difficulties due to adverse weather conditions affecting the arabica harvest and the 50% U.S. tariff introduced in August. Moreover, even with a good harvest pace, coffee has been taking longer to reach exporters this year.

Exports to the United States dropped 46% YOY and 26% from July, totaling 301,000 bags. Despite the sharp decline, the U.S. remained Brazil’s second-largest destination, behind Germany, and continues to be the world’s top coffee importer in 2025.

The barter ratio — the amount of coffee needed to purchase one metric ton of fertilizer — improved significantly in August. Only 1.2 bags (60kg) were required to buy one ton of fertilizer (blend 20-05-20), down 29% from August 2024 (1.7 bags) and 26% from July (1.6 bags). The improvement was driven by rising coffee prices and falling fertilizer prices, particularly for urea, boosting producer profitability.

After several months of decline, coffee prices rebounded sharply in August, with arabica up 31% and conilon (robusta) up 32%. The price rally was fueled by slower Brazilian exports and low global inventories, while the new U.S. tariffs added further volatility. The move has prompted U.S. roasters to seek alternative supply sources. In the short term, the U.S. industry is expected to rely on existing inventories while awaiting potential tariff renegotiations. One immediate workaround has been the use of bonded warehouses, which allow coffee storage without immediate tariff payments. Since the tariff announcement on July 9, certified stocks in New York have fallen by 157,000 bags.

The EU Deforestation Regulation (EUDR) has also influenced trade flows. Anticipating compliance challenges, European buyers increased imports early in 2024, and a similar pattern is expected in the second half of 2025. Data shows that European coffee inventories have been building in recent months.

Weather conditions in August were seasonally dry, which supported the near-complete harvest. However, frost affected some arabica-producing regions, particularly in Cerrado Mineiro, where local cooperatives estimate potential losses of around 412,000 bags for the 2026 crop. While this raises concerns for the next harvest, analysts say the 2026/27 arabica and conilon cycle remains positive overall. In the coming weeks, market attention will turn to rainfall and flowering, as any threat to crop potential could further support coffee price gains.

Jacu Bird Coffee Escapes Trump’s Tariffs as Brazil’s Specialty Exports Collapse

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São Paulo – Qahwa World

While Brazil’s premium coffee exports are reeling under heavy U.S. tariffs, one unusual specialty brew has managed to stay untouched: coffee produced from beans eaten and excreted by the Jacu bird.

In early August, U.S. President Donald Trump imposed a 50% tariff on Brazilian goods amid a political dispute with President Luiz Inácio Lula da Silva. The move has slashed U.S. imports of Brazilian specialty coffee by nearly 70% in August alone, according to the Brazilian Specialty Coffee Association. The damage has been especially severe for premium brands, long favored by American consumers.

Yet Jacu Bird coffee — a rare Arabica harvested at Fazenda Camocim in Brazil’s Atlantic Forest — has emerged unscathed. The beans are naturally processed through the digestive tract of the Jacu, a fruit-eating bird of the Penelope species, giving the coffee a distinctive floral aroma and balanced acidity.

“Americans don’t have the same vision as the Japanese, Asians, Saudis, or Europeans in seeking out this type of quality,” said Henrique Sloper, producer and CEO of Fazenda Camocim. “For us, the tariffs don’t affect this product.”

Jacu Bird coffee, which can fetch up to £960 ($1,300) per kilo, has gained strong followings in Japan, Europe, and parts of the Middle East. Its production was inspired by Indonesia’s famous Kopi Luwak, made from beans digested by civets.

Rogerio Lemke, agriculture supervisor at Fazenda Camocim, explained that the bird’s varied diet enhances the beans’ profile: “The Jacu eats fruit as well as coffee. Inside its craw, the coffee absorbs the fruit’s characteristics, adding complexity to the cup.”

While this niche product thrives, the broader sector is suffering. Brazil’s coffee exporters group Cecafe confirmed that specialty beans have been hardest hit by the tariffs, driving a “ruinous” decline in shipments to the U.S.

Sloper admitted the farm’s other coffees, which form the bulk of production, are facing losses: “America is the largest coffee market in the world, and we’re shut out. In the short term, it’s very bad. But in the medium and long term, it may push us to open other markets.”

For now, the Jacu Bird — once seen as a nuisance in coffee groves — has unexpectedly become a symbol of resilience in Brazil’s struggling specialty coffee industry.

Coffee Prices Mixed as Robusta Surges and Arabica Faces U.S. Tariff Pressure

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Dubai – Qahwa World

Coffee futures ended Monday in mixed territory as robusta prices climbed on concerns over heavy rains in Vietnam, while arabica remained under pressure from uncertainty surrounding U.S. tariff policy and ongoing harvest progress in Brazil. December arabica (KCZ25) fluctuated during the session and ultimately closed down -1.50 (-0.41%), while November robusta (RMX25) gained +121 (+2.93%).

The sharp rise in robusta was fueled by forecasts of heavy rainfall across Vietnam’s Central Highlands, the country’s key growing area, which could damage cherries entering their final stage of development before harvest. Vietnam, the world’s largest producer of robusta, continues to play a decisive role in global market movements. Despite the short-term weather risks, the country is still expected to deliver a bumper crop, with 2025/26 production projected to climb 6% year-on-year to 1.76 million metric tons, or 29.4 million bags, the highest level in four years. Export momentum remains strong as well, with shipments from January to August up 7.8% compared with the previous year, reaching 1.141 million metric tons.

Arabica, meanwhile, faced renewed selling pressure linked to the policy debate in Washington, where lawmakers are considering a bill that would exempt coffee imports from tariffs. The United States currently maintains a 50% tariff on Brazilian imports, a measure that has disrupted traditional trade flows and forced buyers to cancel contracts. This has tightened U.S. supplies significantly, with ICE-monitored arabica inventories falling to a 17-month low of 643,341 bags. Robusta inventories also dropped to a 1.75-month low of 6,464 lots. The trade impact is considerable, since Brazil accounts for roughly one-third of America’s unroasted coffee imports.

While tariffs weigh on demand for arabica, supply-side pressures in Brazil are offering a degree of support. Somar Meteorologia reported that Minas Gerais, Brazil’s largest arabica-producing state, received only 10.5 millimeters of rain during the week ending September 20, representing just 73% of the historical average. September is a critical flowering month for coffee trees, and any shortage of rain could compromise the next crop cycle. Earlier this month, Brazil’s crop agency Conab cut its forecast for the 2025 arabica harvest by 4.9% to 35.2 million bags and lowered total coffee production to 55.2 million bags, reinforcing concerns about supply.

Globally, the balance remains tight despite expectations of record output. The USDA’s Foreign Agriculture Service projects that world coffee production will increase by 2.5% in 2025/26 to reach 178.68 million bags. Arabica output, however, is forecast to decline 1.7% to 97 million bags, while robusta is expected to rise by nearly 8% to 81.6 million bags. This uneven growth underlines the structural imbalance in the market. Commodity trader Volcafe has warned that the arabica deficit will widen to 8.5 million bags in 2025/26, compared with 5.5 million bags in the previous cycle, marking the fifth consecutive year of shortfalls.

Export figures add further weight to bullish sentiment. The International Coffee Organization reported earlier this month that global shipments in July fell 1.6% year-on-year to 11.6 million bags, while cumulative exports for the first ten months of the current season declined 0.3%. Brazil’s shipments saw particularly sharp declines. Data from the Trade Ministry showed that unroasted coffee exports in July plunged 20.4% to 161,000 metric tons, while exporter group Cecafe reported green coffee shipments down 28% to 2.4 million bags. Robusta exports collapsed by nearly half. In total, Brazil’s shipments between January and July dropped 21% to 22.2 million bags.

In the short term, harvest pressure continues to weigh on arabica prices. Brazil’s Cooxupe cooperative, the country’s largest exporter group, reported that its members had completed 98.9% of the harvest by September 12, signaling that near-term supply remains ample. Yet market participants remain cautious about the months ahead, with the National Oceanic and Atmospheric Administration forecasting a 71% chance of La Niña developing between October and December. Such a weather pattern could intensify drought conditions in Brazil and place the 2026/27 crop at risk.

The global coffee market thus finds itself pulled in opposite directions. On one side, robusta prices are supported by immediate weather risks in Vietnam, while arabica is weighed down by trade policy uncertainty and harvest dynamics in Brazil. On the other, tightening inventories, shrinking exports, and the prospect of continued arabica deficits provide a strong bullish undertone. With weather volatility and geopolitical trade policies both in play, analysts expect price swings to remain a defining feature of the market for months to come.

Myanmar Targets 100,000 Acres of Coffee Cultivation in Ambitious Expansion Plan

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Yangon – Qahwa World

Myanmar has unveiled an ambitious plan to expand coffee cultivation to 100,000 acres nationwide within the next two years, as part of efforts to boost agricultural exports and enhance rural incomes. The initiative, announced by the Department of Agriculture and reported by state media, includes support for farmers through the provision of seeds, seedlings, and technical assistance.

According to the department, Myanmar currently has about 63,226 acres under coffee cultivation. Two main varieties are being grown: Arabica, which dominates higher-altitude regions, and Robusta, cultivated in lowland areas. Expansion will target key regions including Nay Pyi Taw, Mandalay, Bago, Ayeyarwady, Mon, Tanintharyi, Sagaing, and Magway.

The short-term goal is part of a broader strategy first outlined in 2022, when authorities announced plans to increase total coffee acreage to 300,000 acres over five years. That earlier plan divided cultivation between 200,000 acres of Arabica across four highland zones and 100,000 acres of Robusta across three lowland zones. The latest 100,000-acre target is seen as a first step toward that larger ambition.

Evidence from the regions shows momentum on the ground. In Tanintharyi Region, the Agriculture Department expanded coffee cultivation by nearly 1,874 acres in fiscal year 2024–2025, bringing the total to over 3,000 acres. Officials there aim to add another 1,000 acres in 2025–2026 and have distributed around 170,000 seedlings to farmers alongside technical training.

Coffee has long been considered a promising export crop for Myanmar, though infrastructure and market access remain challenges. A report in 2023 estimated the country’s annual output at more than 9,000 tonnes, with Arabica accounting for nearly 7,000 tonnes and Robusta the remainder. Shan State and other upland regions remain the backbone of production.

Industry observers note that while the government’s targets are ambitious, coffee trees typically require three to five years to reach maturity, meaning today’s plantings will not immediately translate into export growth. Experts also highlight the need for investments in processing facilities, transport infrastructure, and international market linkages to ensure Myanmar’s coffee can compete globally.

Myanmar’s drive to rapidly scale up coffee cultivation underscores its determination to diversify exports and support rural communities. Yet the gap between announced acreage goals and independently verified progress remains significant, leaving questions about how quickly the sector can meet international demand.

Ethiopian Coffee Farmers Face Heavy Burden from New EU Regulations

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Saddama, Ethiopia – Qahwa World

Al Jazeera has broadcast a filmed report highlighting the impact of the European Union’s anti-deforestation regulations, which are set to come into force on December 30, 2025, after several delays in implementation.

According to the report, the new EU rules are leaving a bitter taste among Ethiopian coffee farmers, who fear losing one of their most important export markets. Roughly one-third of Ethiopia’s coffee production is shipped to the European Union, but the regulations now require proof of origin for every single consignment.

Smallholder Farmers at Risk

For smallholder farmers—the backbone of Ethiopia’s coffee sector—compliance represents a costly and exhausting burden. One producer commented: “Denying us access to the European market is like a punishment, like sanctions. While China financially supports its companies to buy African coffee, the EU does nothing—worse, it increases the burden on us.”

In response, some farmers have started planting shade trees and adopting more sustainable practices. “We no longer cut down trees; we use them sustainably to protect our environment and our crops,” one farmer explained. Training programs have been introduced to help farmers adjust, but challenges remain. A French government study revealed that EU coffee consumption is responsible for nearly half of coffee-related deforestation worldwide, making traceability an urgent priority for European policymakers.

What Are the New EU Rules?

The regulations, known as the EU Deforestation Regulation (EUDR), were approved by the European Parliament in 2023 and will be phased in between 2025 and 2026. They apply to key commodities including coffee, cocoa, soy, palm oil, and timber. The goal is to ensure that no product entering the EU market contributes to deforestation or ecosystem degradation.

Under the rules, importers and exporters must provide detailed information on the origin of products through a dedicated traceability and digital system, using geographic coordinates and satellite mapping of farms. Companies and farmers are required to submit “due diligence statements” to guarantee transparency throughout the supply chain.

Ethiopia’s Challenges

In Ethiopia, where more than four million small-scale farmers cultivate coffee, meeting these requirements appears nearly impossible without broad support. Land surveys and mapping are already underway. One certification officer noted: “At first, some farmers didn’t understand why this was necessary. But so far, we’ve completed 75% of the mapping, and our goal is to register 5,000 farms by the end of the year.” Yet this is only a fraction of the total sector.

The European Commission has pledged to provide assistance but stressed that cooperatives and local governments must also play their part in financing and supporting the transition. Starting January 1, 2026, larger producers will be required to comply immediately, while smallholders have until July 2026. Despite repeated calls for an extension, the EU has made clear it does not intend to delay the deadlines further.

Global Implications

Observers see the move as a double-edged sword. On one hand, it could foster sustainability and help curb deforestation in producing countries. On the other hand, it risks pricing small farmers out of the market, pushing them toward less demanding destinations such as China or Middle Eastern countries.

Ethiopia—the birthplace of coffee and Africa’s largest exporter—now faces a decisive challenge: adapt to the costly EU rules, or risk losing access to its most lucrative market in Europe.

Germany Earns More From Coffee Than Producing African Nations

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Berlin – September 14, 2025 – (Qahwa World) – Germany, a country that does not grow coffee, has become one of the most influential players in the global coffee industry, earning more from exports than all African producing nations combined. In 2024, Germany exported over 473,000 tonnes of coffee worth €6 billion, largely by importing raw beans from producing countries and re-exporting them after processing and branding.

Africa, home to 18 coffee-exporting countries including Uganda, Ethiopia, Kenya, and Rwanda, remains dependent on raw bean exports. Uganda recently overtook Ethiopia as the continent’s leading exporter, shipping nearly 800,000 bags in May 2025 alone, worth $243 million. Ethiopia, long considered the historic heart of coffee, followed with 43,481 tonnes during the same period. Data from the International Coffee Organization covering March 2023 to February 2024 shows Uganda shipped over six million bags, compared with Ethiopia’s 3.5 million, while other producers such as Tanzania, Côte d’Ivoire, and Kenya trailed with far smaller volumes.

The disparity lies in value addition. A KPMG study as far back as 2014 highlighted that Africa exported coffee worth $6 billion while the global coffee industry exceeded $100 billion, driven by roasting, blending, packaging, branding, and sustainable certification. Germany has built its dominance on precisely these steps, importing nearly one million tonnes of green coffee in 2023, 91 percent directly from producing nations. Brazil supplied the largest share at 341,000 tonnes, followed by Vietnam, Honduras, Uganda, Colombia, and India. Even when imports declined by 17 percent that year, Germany’s reserves ensured its exports continued without disruption.

The contrast underscores a hard truth: while coffee was born in Africa, most of its wealth is captured elsewhere. Unless producing nations invest in roasting, branding, and specialty development at origin, they will remain suppliers of raw beans while others reap the greater rewards.

Roasted and Soluble Coffee Exports Decline in July 2025

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Dubai, September 6, 2025 (Qahwa World) – The International Coffee Organization’s (ICO) August 2025 report has revealed a significant decline in exports of both roasted and soluble coffee in July, underscoring new challenges facing the global coffee sector as it navigates volatile prices, shifting demand, and rising production costs. The data highlights not only pressure on green coffee but also on finished products that reach consumers directly, raising concerns about structural changes in the industry.

According to the report, roasted coffee exports fell by a dramatic 63%, reaching only 30,000 bags compared to 81,000 bags in July 2024. This steep contraction marks one of the sharpest drops in recent years for a category that reflects direct consumer demand for value-added coffee products. Soluble coffee exports also registered a decline, albeit more modest, down 5% to 1.08 million bags from 1.13 million bags a year earlier. While less severe, the slowdown in soluble exports is significant because this category has long been considered one of the most resilient and widely consumed segments in global markets, particularly in emerging economies.

Analysts attribute the decline in roasted coffee exports to several interlinked factors. The most immediate is the surge in global coffee prices, with the ICO Composite Indicator Price (I-CIP) climbing by 14.6% in August to 297.05 US cents per pound, its highest level since 2024. Such historic price levels have curbed demand for high-cost roasted products, especially in advanced markets such as Europe and North America, where consumers are already grappling with inflation and higher living expenses. At the same time, exporters face mounting challenges from rising production and shipping costs. Energy, labor, and logistics expenses have all increased in recent months, eroding margins and forcing some companies to scale back international shipments in favor of local markets where conditions are more stable.

For soluble coffee, the 5% drop highlights a different dynamic. Traditionally, this segment has thrived in developing and price-sensitive markets due to its affordability and convenience. Yet even here, demand appears to be shifting. In mature markets, growth has slowed as consumers gravitate toward specialty coffee and fresh roasted options, reflecting a broader trend toward quality and experience rather than convenience alone. In competitive producing countries such as Vietnam and India, rising production capacity has intensified rivalry, putting pressure on exporters to maintain prices and market share. Younger generations in many countries are also seeking more diverse coffee experiences, leading to gradual erosion in the dominance of instant coffee.

The decline in both roasted and soluble exports has broader economic implications. It signals that pressure in the coffee sector is not limited to green coffee or raw supply but extends throughout the value chain. Combined with the ICO’s data showing global coffee stocks at their lowest level since April 2024, the contraction in finished product exports adds another layer of vulnerability to a market already characterized by price volatility and supply uncertainty. Experts warn that if these trends persist, the industry could face an extended period of turbulence, with higher prices for consumers and tighter margins for producers.

Still, opportunities remain in certain regions. Demand for soluble coffee continues to expand in parts of Africa and Asia, albeit at a slower pace, offering some relief for exporters. However, regulatory challenges such as the upcoming EU Deforestation Regulation (EUDR), set to take effect at the end of 2025, are expected to add new hurdles for suppliers attempting to maintain access to key European markets. For roasted coffee, niche segments such as specialty blends and locally branded products may offer pathways to sustain growth, but producers will need to adapt quickly to changing consumer preferences.

The ICO emphasized that roasted and soluble coffee exports should be monitored closely as indicators of global consumption trends. If the declines seen in July extend over the coming months, it could mark the beginning of a deeper shift in how coffee is traded and consumed worldwide. In that scenario, volume alone would no longer be the main metric of success; value-added innovation, consumer engagement, and adaptability to regulatory and market changes would become critical to survival. For now, the combined 63% plunge in roasted coffee exports and the 5% drop in soluble shipments serve as a stark reminder that the challenges facing the coffee sector go beyond farms and warehouses and reach all the way to the consumer’s cup.

Indian Coffee Producers Welcome GST Reduction to 5%

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New Delhi, September 5, 2025 (Qahwa World) – India’s coffee sector has warmly welcomed the government’s decision to cut the Goods and Services Tax (GST) on coffee from 12% and 18% down to 5%, describing it as a historic move that will boost domestic consumption and strengthen the country’s competitiveness in global markets.

The decision, adopted during the 56th GST Council meeting chaired by Finance Minister Nirmala Sitharaman, simplified the tax system into two primary slabs: 5% for essential and merit goods, and 18% as the standard rate, while keeping a 40% rate for de-merit goods such as tobacco and luxury items. Coffee was placed under the merit category, and starting September 22, roasted, instant, and processed coffee products will all benefit from the reduced tax rate.

Fresh Momentum for Domestic Consumption

For Neleema Rana George, Managing Director of Kelachandra Coffee, one of India’s oldest plantation companies dating back to 1786, the move marks a defining moment. She stressed that classifying coffee as an essential good would make it more widely available and affordable, thereby encouraging daily consumption, opening new avenues for growth, and creating greater balance between farmers, processors, and retailers. She emphasized that the positive impact of this decision “will extend from farm to cup.”

Neleema Rana George, Managing Director of Kelachandra Coffee

Specialty Coffee Poised for Growth

In the specialty sector, Devesh Khushalani, Co-Founder of Kranti Coffee, described the tax cut as “a ray of hope after a difficult period,” noting that lowering GST to 5% translates into fairer prices for consumers, allowing them to access Indian nano-lots and strengthening café culture.

He also pointed to pioneers such as Ashok Patre of Ratnagiri Estate and Hamsini of Sangameshwar Coffee Estate, who have positioned Indian coffee on the global stage through innovative processing methods and micro-lots that have scored above 90 points.

Devesh Khushalani, Co-Founder of Kranti Coffee

Export Competitiveness and Sustainability

From Rajasthan, Radhika Kabra, Founder of Qetli Coffee, underlined the global impact of the reform. She explained that cutting taxes on processing, packaging, and logistics by up to 6% gives Indian coffee a stronger edge against major producers like Vietnam and Brazil. According to the Coffee Board of India, export volumes are expected to grow by 15–20% in the coming year. Kabra said she plans to reinvest these savings in sustainable practices such as water-efficient drip irrigation, which will generate jobs and support local farmers.

She also noted that importers stand to benefit: “Lower GST makes Indian coffee more competitive, reducing prices by 4–5% and enabling access to GI-tagged varieties such as Coorg Arabica and Wayanad Robusta at better rates for international markets.”

Radhika Kabra, Founder of Qetli Coffee

A New Chapter for Indian Coffee

Across the sector, there is consensus that this tax reform is not merely a financial adjustment but a transformative milestone. It promises to drive domestic demand, fuel innovation, and reinforce India’s standing as a rising force in the global coffee trade.

As the September deadline for implementation approaches, optimism is running high. For many, the reform signals the beginning of a new chapter: one in which coffee becomes more accessible to millions of Indian consumers while also expanding its footprint on the world stage.

Coffee Prices Continue to Rise as Global Supplies Decline

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Dubai, 4 September 2025 (Qahwa World) – Coffee prices closed higher on Wednesday amid tightening global supplies, with both arabica and robusta contracts gaining momentum. December arabica futures (KCZ25) rose by +3.30 cents (+0.89%), while November robusta (RMX25) advanced by +55 USD (+1.25%), bouncing back from a recent 1.5-week low.

The International Coffee Organization (ICO) reported that global coffee exports in July dropped -1.6% year-on-year to 11.6 million bags, while cumulative exports for October to July slipped -0.3% to 115.6 million bags. This contraction, combined with falling exchange-monitored inventories, supported the market. ICE-monitored robusta inventories fell to a 1-month low of 6,552 lots, while arabica stocks declined to a 1.25-year low of 686,863 bags.

Concerns about tighter U.S. coffee supplies also added support, as American buyers canceled contracts for Brazilian coffee following the 50% tariffs imposed on Brazilian exports to the U.S. Since Brazil supplies about a third of unroasted coffee to the American market, the move is further tightening availability.

In Brazil, above-average rainfall has eased crop concerns ahead of the crucial flowering period. Somar Meteorologia reported that Minas Gerais, the country’s largest arabica-growing area, received 163% of the historical average rainfall during the last week of August. Meanwhile, the harvest is nearly complete, with Cooxupé, Brazil’s largest cooperative, announcing that 94.9% of its members’ harvest was done by August 29, while Safras & Mercado estimated the national harvest at 99% complete as of August 20. Despite this, export data reflects a slowdown, with Brazil’s Ministry of Trade reporting that July unroasted coffee exports plunged -20.4% y/y to 161,000 MT, and exporter group Cecafé noting that green coffee shipments fell -28% y/y to 2.4 million bags, including a -49% drop in robusta exports.

Vietnam, the world’s leading robusta producer, continues to face drought-related challenges. Production for the 2023/24 crop fell -20% y/y to 1.47 MMT, the smallest in four years, while 2024 exports declined -17.1% y/y to 1.35 MMT. The Vietnam Coffee and Cocoa Association has revised its 2024/25 production outlook downward to 26.5 million bags, though the National Statistics Office reported a +6.9% y/y increase in January–July 2025 exports, reaching 1.05 MMT.

Looking ahead, the USDA’s Foreign Agriculture Service projects that world coffee production in 2025/26 will climb +2.5% y/y to a record 178.7 million bags. This includes a -1.7% decline in arabica output to 97 million bags and a +7.9% increase in robusta to 81.6 million bags, with ending stocks expected to rise +4.9% to 22.8 million bags. However, trader Volcafé forecasts a global arabica deficit of -8.5 million bags for 2025/26, deeper than the -5.5 million bag deficit recorded in 2024/25, marking the fifth consecutive year of arabica shortfalls despite stronger robusta production.