Tag: coffee supply chain

How the Blockage of the Strait of Hormuz Impacts the Coffee Sector

Posted on by Qahwa World
Source: International Coffee Organization (ICO)
Author: Coffee World – Dubai
Date: May 20, 2026

Executive Summary

  • Reduced shipping flows through the Strait of Hormuz since March threaten global coffee supply chains.
  • Brent crude prices jumped 63% from $72.29/barrel in February to $118.03/barrel in April.
  • Urea fertilizer prices rose 47% from $465.45/ton to $684.75/ton over the same period.
  • One-quarter to one-third of global fertilizer trade passes through the Strait, with Qatar supplying 14% of the world’s urea.
  • Fertilizer accounts for 23% of production costs in Brazil and 26% in Vietnam, hitting smallholders hard.
  • The Middle East imports 8.6 million bags of coffee annually (4.5% of global imports), making regional demand vulnerable to instability.

The Strait of Hormuz: A Global Oil Artery Under Pressure

The International Coffee Organization warns that geopolitical tensions in the Middle East could generate significant ripple effects across global commodity markets, and coffee is no exception. The Strait of Hormuz is one of the most critical chokepoints in global trade, with around one-fifth of the world’s oil supply passing through it. Since March, shipping flows through the strait have been reduced, triggering higher oil prices, increased fuel costs, and greater volatility in freight markets.

Brent crude prices increased from $72.29 per barrel on February 27 to a high of $118.03 per barrel on April 29 – a jump of more than 63%. This directly affects coffee transport costs, inland logistics, and fertilizer prices, all central elements of production and export economics.

Fertilizer: The Weak Link in the Chain

Fertilizers are essential for coffee production. Between one-quarter and one-third of the global fertilizer trade – and up to one-third of nitrogen fertilizers (urea) – transits through the Strait of Hormuz. The Gulf region is a major fertilizer producer, with the Qatar Fertiliser Company (QAFCO), considered the world’s largest urea supplier, alone providing 14% of global urea.

As a result, the price of urea fertilizer rose from $465.45 per ton to $684.75 per ton over the same period – a 47% increase. For coffee-producing countries like Brazil and Vietnam, fertilizers represent a large share of production costs: 23% in Brazil and 26% in Vietnam. Smallholders, who operate on thin margins, are the most vulnerable to these increases.

Indicator Feb 27, 2026 Apr 29, 2026 Increase
Brent Crude (USD/barrel) 72.29 118.03 63%
Urea Fertilizer (USD/ton) 465.45 684.75 47%

The Middle East: A Strategic Consumer Region Under Pressure

The Middle East has become an increasingly important coffee-consuming region, with strong demand growth across Gulf countries over the past two decades. In 2024, imports to the Middle East reached 8.6 million bags, representing 4.5% of total world imports. Any regional instability may affect import demand, port operations, and re-export hubs such as the United Arab Emirates, which plays a strategic role in regional distribution and specialty coffee trade.

According to the European Coffee Federation, tensions around the Strait of Hormuz, combined with ongoing instability in the Red Sea, are pushing shipping lines to use longer alternative routings via the Cape of Good Hope. This leads to extended transit times, tighter vessel capacity, higher fuel costs, and additional security-related surcharges – especially for Ethiopia, which uses the port of Djibouti near the conflict zone.

Coffee Futures Markets: Extreme Sensitivity

Coffee futures markets are highly sensitive to macroeconomic uncertainty. Heightened geopolitical risk tends to strengthen the US dollar while intensifying speculative movements across commodities. For producing countries, whose local currencies are closely linked to export revenues, exchange-rate volatility can create both opportunities and risks, influencing farmgate prices and export competitiveness.

At this stage, the ICO considers it premature to draw conclusions or project specific market outcomes. However, it identifies several indicators the sector should monitor closely in the coming months: energy prices, freight rates, fertilizer costs, trade insurance premiums, currency volatility, and shifts in demand in key importing markets.

Conclusion: A Global Coffee Sector at Risk

Coffee is a deeply globalized sector, and its resilience depends on stable trade systems and international cooperation. In times of geopolitical uncertainty, transparency, market intelligence, and coordinated dialogue become even more important. The ICO will continue to monitor developments and provide timely analysis to support producing and consuming countries in managing potential risks to the sector.

Frequently Asked Questions (FAQ)

1. How much have oil prices increased since the Strait of Hormuz crisis began?

Brent crude prices rose 63%, from $72.29 per barrel on February 27 to $118.03 per barrel on April 29, 2026.

2. How does the Strait crisis affect fertilizer prices?

Urea fertilizer prices increased 47% over the same period because one-quarter to one-third of global fertilizer trade passes through the strait.

3. What is the fertilizer cost share for Brazil and Vietnam?

Fertilizer accounts for about 23% of production costs in Brazil and 26% in Vietnam, making them highly vulnerable.

4. How much coffee does the Middle East import annually?

The Middle East imported 8.6 million bags in 2024, which is 4.5% of total global coffee imports.

5. What alternative shipping routes are being used?

Ships are taking the longer Cape of Good Hope route, increasing transit times, fuel costs, and congestion in Mediterranean ports.

6. Can the ICO predict precise market outcomes?

No. The ICO says it is premature to draw conclusions but urges monitoring of energy, freight, fertilizer, currency, and demand indicators.

Author: Coffee World – Dubai  |
Source: International Coffee Organization (ICO)  |
Publication date: May 20, 2026

Dr. Steffen Schwarz: EUDR Simplification Remains an Administrative Monster

Posted on by Qahwa World
Dubai – Ali Al Zakry | Qahwa World

On May 4, the European Commission published its “simplification” package for the Deforestation Regulation. Some saw it as genuine relief. Others called it cosmetic. Dr Steffen Schwarz described the EUDR as an administrative monster.

Qahwa World opened this file from the beginning. We spoke to six experts from four continents. We published a preliminary investigation summarizing their views. Now we publish the full episodes, one expert per episode, with complete, unedited answers.

Our first guest is Dr. Steffen Schwarz, an applied coffee science expert from Germany and co-founder of Applied Coffee Science. He describes the simplified regulation as “still an administrative monster for many small actors.”

Here is the full interview.

  • What is your overall take on the EU simplification decision? Does it truly reduce the burden, or is it mostly cosmetic?

Dr. Steffen Schwarz: My overall view is that the simplification helps at the margins, but it does not solve the core problem. The EUDR remains an administrative monster for many small actors in the coffee chain.

The intention is absolutely right. Nobody in coffee can seriously argue against forest protection. The question is whether the instrument is proportionate and intelligent enough. At the moment, I fear that it mainly simplifies the system for those who already have the structures to deal with it: large importers, large exporters, certification bodies, and companies with compliance departments.

For small roasters, small importers, and direct trade relationships, the fundamental burden remains. Coffee is not only a bulk commodity. Many of the most valuable coffees in Europe come from small farms, old varieties, rare cultivars, agroforestry systems, and micro-lots. These coffees may be fully deforestation-free, but proving that in the required administrative format can become disproportionately expensive.

So yes, simplification is welcome. But if the system still makes it easier to import large, standardized volumes than small, diverse, direct-trade lots, then we have not fixed the real problem.

  • Who benefits the most from this simplification?

The biggest beneficiaries will probably be large companies and low-risk exporting countries with organized documentation systems. They can spread compliance costs over large volumes and integrate the EUDR into existing legal, digital, and certification structures.

Small producers may benefit on paper, especially where simplified declarations or reduced obligations apply. But many smallholders outside the EU will still feel the pressure indirectly. The legal obligation may sit with the European operator, but the demand for geolocation data, legality evidence, and traceability will travel upstream to the farm level.

That is where the danger lies. A small farmer who grows coffee under shade, preserves old varieties, and has never cleared forest may still be excluded if the paperwork is too difficult or too expensive. The system may not intentionally discriminate against smallholders, but its practical effect could do exactly that.

In my view, the real winners are those who can industrialize compliance. The potential losers are those whose strength lies in quality, diversity, and relationship-based trade rather than administrative capacity.

  • Soluble coffee is now fully covered, after being excluded before. How do you see this affecting coffee traders and roasters worldwide?

Dr. Steffen Schwarz: From a regulatory logic, including soluble coffee makes sense. If the aim is to prevent deforestation-linked coffee from entering the European market, then it would be inconsistent to regulate green and roasted coffee but leave soluble coffee outside.

However, soluble coffee is often based on complex, high-volume, multi-origin supply chains. It may involve large blends, several processing stages, and coffee from many farms, regions, or countries. That makes traceability more complicated.

For large soluble coffee manufacturers, this will create additional compliance work, but they are generally better equipped to manage it. For traders supplying the soluble industry, the pressure will increase significantly. They will need cleaner documentation, stronger segregation, and better origin data.

The risk is that soluble coffee supply chains will become more consolidated. Suppliers who cannot provide the required documentation may simply be removed from the chain. Again, the coffee may not necessarily become better or more sustainable. It may simply become easier to document.

Is the global coffee supply chain ready for the December 30, 2026 deadline? If not, which part of the industry will take the biggest hit?

Dr. Steffen Schwarz: No, not fully. Some parts of the industry are ready, especially larger exporters, organized cooperatives, multinational traders, and companies already working with detailed traceability systems. But the global coffee sector as a whole is not ready.

The biggest hit will be taken by small producers, small exporters, small importers, and independent roasters working with direct-trade lots. These actors often have the most transparent human relationships, but not always the administrative infrastructure required by the EUDR.

Geolocation is a good example. In theory, it is a powerful tool. In practice, collecting, verifying, storing, and transmitting accurate plot-level data across thousands of small farms is a major challenge. Keeping the December 2026 deadline means that many supply chains will have to make fast decisions.

The easiest decision will often be to reduce complexity: fewer origins, fewer small suppliers, fewer micro-lots, fewer experimental coffees.

That is my main concern. Europe may end up protecting itself legally, while weakening some of the most meaningful forms of sustainable coffee trade.

The EUDR asks the right moral question: should Europe consume coffee linked to deforestation? Clearly, no. But the next question is just as important: can Europe protect forests without pushing small farmers, old varieties, direct trade, and coffee diversity out of the market?

At present, I am not convinced that we have achieved that balance.

Qahwa World – Episode Two tomorrow with Kim Thompson, Co-Founder of RAW Coffee Company in Dubai.

Read Related stories:

EUDR Simplification: Six Voices from the Coffee Industry Speak

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

 

 

Coffee Sector Lags on Deforestation Commitments, Forest 500 Finds

Posted on by Qahwa World

DUBAI – Qahwa World

The European Union’s landmark Deforestation Regulation (EUDR) is driving corporate change across Europe, yet the coffee sector remains one of the weakest performers on key deforestation-risk indicators, according to the 2026 edition of the Forest 500 report released by UK-based environmental NGO Global Canopy.

Now in its 12th year, the annual Forest 500 assessment ranks 500 companies with the greatest influence over nine forest-risk commodities: beef, cocoa, coffee, leather, palm oil, pulp and paper, rubber, soy, and timber, using only publicly available information disclosed on company websites.

Global Canopy has publicly opposed further delays or simplifications to the EUDR. The Forest 500 initiative is supported by Climate Arc and the Norwegian Agency for Development Cooperation (Norad).

“While some battles have been won, this year’s Forest 500 data shows that the fight against deforestation is still being needlessly lost,” the report’s executive summary states. “The year 2025 was at the heart of high-profile corporate targets to end deforestation, but these have now been missed. As in previous years, too few companies are acting with enough urgency.”

Limited Progress Across Sectors

Just 68 of the 500 companies (14%) referenced the EUDR in their public deforestation-related disclosures. Traceability mechanisms showed improvement across eight of the nine commodities. However, the report describes the EUDR as arriving “in a delayed and diluted form” following the EU’s decision to postpone enforcement to December 30, 2026 for large and medium operators and traders, and June 30, 2027 for micro and small operators.

The regulation, adopted in 2023 and originally scheduled for late 2024 enforcement, aims to block deforestation-linked products from entering European supply chains.

Mixed Results for Coffee

The coffee sector delivered a mixed performance. The share of Forest 500 companies with a public deforestation-free commitment for coffee rose to 47% in 2025, up from 44% the year before. Public evidence of traceability systems also improved, climbing to 18% from 14%.

Yet on one of the report’s most concrete metrics, the percentage of companies publicly reporting that more than half their coffee volumes are deforestation- and conversion-free, coffee ranked near the bottom of all nine commodities at just 5%, down from 7% in 2024. Only leather scored lower, at 1%.

How Companies Are Scored and Categorized

Each company receives a percentage score: 25% based on the strength of its commitments and 75% on implementation, reporting, and verification.

The report groups companies into three categories:

  • Leaders: Strong commitments across all relevant commodities and significantly stronger implementation than peers.
  • Late Majority: Some intent to address deforestation, but only partial commitments and weak implementation progress.
  • Laggards: No zero-deforestation or conversion-free commitments at all.

Separately, the report identifies 14 companies that backtracked on deforestation action and 24 “persistent laggards” that have failed to publish any deforestation commitment since 2014.

Coffee Sector Standouts

Among coffee-relevant companies, Nestlé is the only Leader highlighted, scoring 71%. The company disclosed that at least 80% of its volumes in beef, coffee, palm oil, pulp and paper, and soy were deforestation- and conversion-free in 2025.

Italian firm FinLav appears in the Laggard category with a 23% score. Vietnamese coffee company Thang Loi Coffee Joint Stock Company is listed among the 14 backtrackers.

Several major roasters and buyers fall into the Late Majority: Starbucks (36%), JDE Peet’s (41%), Keurig Dr Pepper (26%), and JM Smucker (14%). On the trading side, scores include Louis Dreyfus (65%), Neumann Kaffee Gruppe (45%), Ecom Agroindustrial (38%), and Sucafina (36%).

Important Context

The Forest 500 captures only a slice of the global coffee industry and evaluates companies solely on what they publicly disclose on their own websites; it does not independently verify on-the-ground performance.

The full 2026 Forest 500 report is available at forest500.org.

Kim Thompson: Coffee on the Edge of Disruption

Posted on by Qahwa World

Dubai – Ali Alzakary

The global coffee industry has spent the past few years navigating one disruption after another—from pandemic shutdowns and climate volatility in producing countries to freight crises that reshaped global shipping routes. As the global coffee market grapples with volatility—production reaching around 175 million bags in 2025 while costs continue to rise due to climate pressures and freight disruptions—the ongoing conflict in the Middle East is adding a new layer of uncertainty to an already fragile supply chain.

Coffee moves through one of the most complex trade networks in the food and beverage sector. Green beans travel from farms across Latin America, Africa and Asia through international ports and maritime corridors before reaching roasters, cafés and consumers. Any disruption to shipping routes, insurance costs or regional logistics can quickly ripple across the industry. For specialty coffee—where freshness, tight margins and long-term sourcing relationships define the business—the impact can be felt even faster.

To understand how the sector is reacting, we spoke with Kim Thompson, Co-Founder  at RAW Coffee Company in Dubai. From monitoring shipments already at sea to preparing technical support systems for cafés, Thompson explains how roasters are navigating rising costs, uncertain logistics and a rapidly shifting geopolitical landscape.

You may like: Oil Surge Could Brew Higher Coffee Prices 

In this conversation, she offers a clear view of what café operators are worrying about right now, how long menu prices can realistically hold, and why the coffee industry’s resilience often comes down to relationships built across the supply chain.

  • Has the “fear factor” kicked in yet? Are you seeing cafés or hotels panic-buying and stockpiling coffee to guard against a potential shortage?

Not really. The reality of the café industry is that most operators are managing week-to-week cash flow, not building strategic stockpiles. Right now the conversations we’re having are far more about cost control than hoarding inventory.

The other factor is freshness. Speciality coffee isn’t a commodity that sits in a warehouse for months. We roast weekly and deliver fresh, so stockpiling doesn’t really fit how quality coffee businesses operate.

Our expectation is that the real response, if there is one, will likely come after Eid al-Fitr, once operators have had time to assess the geopolitical situation and think through their own coping strategies. At the moment, people are watching closely rather than panicking.

  • The coffee you’re roasting today was bought at pre-war prices — how long can you hold your current menu prices before new logistics costs force your hand?

The uncomfortable truth is that price pressure in coffee started well before this conflict. The industry has already been absorbing significant increases at origin, higher processing costs, and rising freight prices for the past two years.

We have already had to adjust pricing once, simply because the economics of producing high-quality coffee have changed globally.

If shipping routes tighten or logistics costs spike again because of regional instability, there’s only so much the supply chain can absorb. Roasters can cushion the impact for a period of time, but eventually the math catches up with everyone.

Coffee has historically been underpriced for the amount of work and risk involved in producing it. What we are seeing now is the global market slowly correcting that reality.

  • Are there specific “origins” or specialty grades that are now effectively “cut off” due to their transit routes through the conflict zone?

At the moment nothing is completely cut off, but logistics has become far more complicated overnight.

We currently have multiple containers on the water and are actively tracking them while exploring alternative routing options that avoid the Strait of Hormuz.

In many ways it feels like a return to the early COVID-19 playbook—scenario planning, contingency routing, and leaning heavily on relationships across the supply chain to keep things moving.

The specialty coffee industry is surprisingly resilient because it’s built on long-term relationships with producers, exporters and logistics partners. When things get unpredictable, those relationships become incredibly valuable.

  • What’s the plan for equipment and spare parts? Is there a risk that a broken espresso machine could stay down because of shipping delays?

Equipment supply is definitely something we’re watching closely, but fortunately we forecasted and planned ahead. We have several containers on the water carrying both commercial and domestic machines, so supply may get tight but we’re not walking into this empty-handed.

More importantly, we have invested heavily in our technical infrastructure. We run a full in-house service department with extensive spare parts inventory, qualified technicians, and swap-out machines available for our commercial partners.

In practical terms, if a café’s machine goes down, we’re structured to keep them operating. The bigger challenge in this industry is rarely the machine itself—it’s the global logistics that sit behind everything.

Oil Surge Could Brew Higher Coffee Prices

Posted on by Qahwa World

Dubai – Qahwa World

Rising oil prices linked to escalating tensions in the Middle East are raising fresh concerns across the coffee sector, with vendors warning that higher fuel costs could eventually translate into more expensive coffee for businesses and consumers.

Crude oil climbed above 90 dollars per barrel on Friday, a level that industry participants say may increase the cost of transporting coffee beans across global supply chains. Because coffee is largely traded internationally and shipped over long distances, higher energy prices can quickly affect freight and logistics costs.

You may like: Vietnam’s Coffee Crisis Could Disrupt Global Supply Chains 

The concern comes only months after the United States removed most tariffs on coffee and several agricultural products last November, a move that had provided temporary relief to importers, roasters and coffee retailers.

  • Shipping Costs Back in Focus

Coffee businesses say transportation costs remain one of the most sensitive factors affecting the price of beans. Any sustained increase in oil prices could raise the cost of shipping green coffee from producing countries to roasting and consuming markets.

Industry observers note that global coffee prices have already been under pressure due to supply challenges in recent years.

According to the World Bank, coffee prices have remained relatively high after adverse weather conditions in several coffee-producing regions reduced harvests and tightened global supply. Earlier expectations suggested that prices might gradually ease this year as production recovered.

However, the recent geopolitical tensions and the accompanying surge in oil prices could introduce new cost pressures, particularly through higher freight rates and supply chain expenses.

  • Uncertain Outlook for Coffee Markets

For coffee retailers and roasters, the coming months may depend largely on how energy markets evolve. Higher fuel costs can affect nearly every stage of the coffee supply chain, from farm transportation and export logistics to international shipping.

While the full impact remains uncertain, market participants say sustained increases in oil prices could add another layer of volatility to an already sensitive global coffee market.

 

Vietnam’s Coffee Crisis Could Disrupt Global Supply Chains

Posted on by Qahwa World

Dubai – Qahwa World

A report published by BeverageDaily warns that challenges facing coffee production in Vietnam could trigger new volatility in global coffee markets, potentially affecting supply chains and prices in the coming years.

Although global coffee prices have recently shown signs of easing, the difficulties confronting Vietnamese coffee farmers may reverse that trend if production declines continue.

  • Vietnam’s Key Role in the Global Coffee Market

Vietnam is the world’s second-largest coffee producer after Brazil and the leading global producer of Robusta coffee. This variety accounts for more than forty percent of global production and plays a central role in commercial coffee blends widely used by major manufacturers such as Nestlé.

You may like: Exclusive: Tobbi Vu on Launching Dubai’s First Vietnamese Specialty Coffee

According to figures cited in the report, Vietnam exports more than 1.5 million metric tons of coffee annually. In 2025, the country’s coffee exports reached approximately 8.92 billion dollars, representing a 58.8 percent increase compared with 2024, largely driven by high Robusta prices.

  • Climate Pressures and Rising Land Costs

Coffee production in Vietnam’s Central Highlands has been increasingly affected by extreme weather conditions. Severe floods and prolonged rainfall last year reduced yields and created concerns among traders, given Vietnam’s central role in global Robusta supply.

At the same time, rising land prices in coffee-growing regions are adding further pressure. Infrastructure development and expanding investment in agriculture have pushed land values higher, encouraging some farmers to sell their farms rather than continue production under tightening profit margins.

Industry observers say coffee farmers today must simultaneously manage climate risks, financial pressures and rising production costs, making the sustainability of farming operations more difficult.

  • Tax Policy Changes

The report also highlights regulatory challenges faced by the Vietnamese coffee sector during 2025 after the introduction of a five-percent value-added tax on certain semi-processed agricultural products, including coffee beans.

Exporters argued that the measure complicated trade procedures and tied up cash flow because exported green coffee is typically zero-rated. Vietnamese authorities later amended the legislation, and the previous tax treatment was restored starting in early 2026.

  • Smaller Roasters May Feel the Impact First

According to the report, disruptions in Vietnam’s coffee sector may initially affect smaller and medium-sized roasters, particularly in Europe, Asia and Australia, which rely heavily on stable supplies of affordable green coffee.

Yoc also read: How Vietnam Turned Coffee Into a Way of Life?

Large multinational companies generally have greater flexibility through diversified sourcing and long-term contracts. Nevertheless, price increases may eventually reach consumers, often with a delay ranging from twelve to twenty-four months.

  • A Possible Shift Toward Higher Value Production

With climate and land constraints limiting expansion in production volume, Vietnam’s coffee industry may increasingly focus on quality improvement and value-added activities.

Some producers may expand into roasting and semi-processed coffee products rather than exporting raw beans alone, a development that could diversify global supply chains over time.

Read also: Brazil Rain and Vietnam Surplus Sink Coffee Futures

The report also notes growing international interest in high-quality Robusta coffees, sometimes referred to as fine Robusta, as climate pressures make Arabica production more vulnerable in certain regions.

  • Investments to Strengthen the Supply Chain

Major coffee companies, including Nestlé, continue to invest in Vietnam’s coffee sector in an effort to strengthen supply chains and promote sustainable farming practices.

Programs supporting drought-resistant coffee seedlings, farm renovation and regenerative agriculture aim to improve productivity and resilience among thousands of farmers in Vietnam’s Central Highlands.

Despite these initiatives, the report suggests that the global coffee industry may still face recurring supply pressures if climate challenges and production costs continue to rise in key producing countries.

African Coffee: Re-Engineering the 2026 Global Market

Posted on by Qahwa World

Dubai – Qahwa World

At a time when global commodity markets are reeling from extreme climate volatility hitting traditional production belts in Brazil and Vietnam, the African continent has emerged in the 2026 season as an indispensable strategic player. This year is more than just a bountiful harvest; it represents a geopolitical turning point in the coffee sector. Africa has successfully bridged a critical global production gap, preventing Arabica and Robusta prices on international exchanges from reaching catastrophic inflationary levels.

  • The Angolan Renaissance

The Angolan experience deserves careful analytical scrutiny. Having invested heavily in its coffee sector over recent years, Angola is no longer a marginal player in 2026. It has become a primary alternative supplier of high-quality Robusta. Land reclamation in regions such as Uíge has not been limited to farming; it included the commissioning of modern centralised processing units that significantly reduced post-harvest losses. This production surge has provided international roasters, particularly in Russia, with a “third option” shielded from the fluctuations of the Vietnamese market, benefiting from preferential shipping rates through recently modernised Atlantic ports.

  • Deciphering the Figures

Looking at raw data, Uganda has achieved an extraordinary milestone with exports nearing 7.05 million bags. This growth, exceeding 50% in certain annual periods, is a direct result of “agricultural intensification” policies and the distribution of high-yield seedlings. In Ethiopia, surpassing the 11 million bag mark amidst logistical challenges is an economic feat. In-depth analysis suggests that Ethiopia capitalised on a “quality premium”. While global Arabica prices surged, Ethiopia offered premium strains with moderate price increases of approximately $2 per kilogram compared to last year—a cost absorbed by quality-hungry markets, providing vital foreign exchange to support the Ethiopian trade balance.

  • Free Trade Logistics

Beyond the farms, a revolution is taking place in supply routes. In 2026, the African Continental Free Trade Area (AfCFTA) began leaving a concrete mark by reducing customs barriers between origin countries and ports. Previously, transit complexities inflated final costs unjustifiably. Today, thanks to digital coordination and standardised procedures, there has been a significant reduction in cross-border transport costs. This logistical saving is the true driver behind African exporters’ ability to offer competitive prices in the Russian market, ensuring African coffee reaches roasting facilities in Moscow and Saint Petersburg with high efficiency and freshness, despite global inflationary pressures.

  • Sustainability as an Economic Shield

African coffee in 2026 is acquiring the status of a “safe haven” for investors. Strains planted in Kenya and Tanzania have shown increased resistance to plant diseases and water scarcity. Economically, this translates to long-term stability. International roasters signing futures contracts with these origins are guaranteed supply continuity, insulated from the recurring climate shocks seen in Latin America. Today, Africa is not just selling its harvest; it is selling “sustainability” as a value-add in a turbulent global market.

 

Note: This analytical reading is based on Q1 2026 performance indicators and preliminary data issued by coffee development authorities in origin countries (such as UCDA and ECTA), taking into account Intercontinental Exchange (ICE) fluctuations and futures contracts reflecting growing confidence in the African crop’s ability to balance global supply and demand.

 

JDE Peet’s Unveils Nature Plan for Sustainable Coffee

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Dubai – Qahwa World

JDE Peet’s has introduced a new Nature Transition Plan aimed at strengthening regenerative agriculture practices and supporting deforestation-free coffee supply chains. The plan, titled Grounded in Nature, outlines a science-based approach to protecting ecosystems, improving farmer resilience, and safeguarding the long-term future of coffee production.

According to the company, the plan aligns with global nature and biodiversity frameworks and translates sustainability commitments into measurable, time-bound actions. It builds on nearly ten years of work under JDE Peet’s Common Grounds program, which has reached close to one million coffee farmers since 2015.

The initiative focuses on ensuring that coffee sourcing contributes to positive environmental outcomes while maintaining sourcing diversity across producing countries. JDE Peet’s emphasized that nature-related risks are already affecting farmers and supply chains, making coordinated action across the coffee sector increasingly urgent.

Key objectives of the Nature Transition Plan include advancing sector-wide efforts to eliminate deforestation from coffee supply chains, expanding regenerative farming practices across an additional 200,000 hectares by 2030, and progressing toward fully responsibly sourced green coffee by 2028. The company reported that responsibly sourced green coffee reached 83.2 percent globally in 2024.

The plan follows a structured approach based on assessing supply chain risks, implementing targeted farmer programs, and tracking progress through transparent measurement and reporting. JDE Peet’s also tailors its mitigation strategies to different coffee-producing regions, reflecting variations in farming systems and production intensity.

Through this roadmap, the company aims to link environmental protection with farmer livelihoods and long-term supply security, positioning nature conservation as a core pillar of the future coffee economy.

Why Dubai Coffee Traders Must Prepare for EUDR now?

Posted on by Qahwa World

The December 2026 EUDR deadline will reshape how African coffee reaches European consumers — and traders in the Gulf are caught in the middle.

By Raymond Reuel Wayesu

Dubai has become the Middle East’s dominant coffee trading hub, with re-exports valued at nearly $1 billion annually and over 615 licensed traders operating through the DMCC Coffee Centre. Much of this coffee originates in East Africa — Ethiopia, Uganda, and Kenya — and is destined for European roasters and retailers.
But a regulatory storm is approaching that threatens to disrupt these established trade flows.

  • What is the EUDR?

The EU Deforestation Regulation (Regulation 2023/1115), which takes effect on 30 December 2026, requires that all coffee entering the European market be verified as “deforestation-free” with plot-level geolocation data. Importers must submit Due Diligence Statements proving their coffee was not grown on land deforested after December 2020.
The scale of this requirement is unprecedented. For Uganda alone, this means geolocating approximately 1.7 million smallholder coffee farmers, each cultivating an average of just 0.18 hectares.

  • Why should Dubai-based traders care?

Here’s the critical issue: traceability chains break when coffee passes through intermediary hubs.

Research from CIFOR-ICRAF found that EUDR compliance maps contain significant accuracy problems—claiming “12% more forest globally than national FAO data” with an “18% chance that a spatial unit marked as forest is considered non-forest in other data” (van Noordwijk et al., 2025). The same researchers warn that smallholders practising agroforestry – the very farmers who have preserved Africa’s remaining coffee forests – could become “collateral damage” of poorly designed compliance systems.

For traders handling mixed-origin lots, the risk compounds. Under EUDR, mixing compliant and non-compliant coffee renders entire shipments non-compliant. Industry analysis estimates that 50% of EU coffee imports are “disenfranchised” — passing through multiple intermediaries with up to ten handlers between farmer and exporter.

The Overseas Development Institute warns that Ethiopia could face “an 18.4% drop in overall exports and a 0.6% decrease in GDP” if coffee exports to the EU cease (Keane et al., 2024). Uganda, now Africa’s largest coffee exporter by volume with 60% of exports destined for Europe, faces similar exposure. UNCTAD’s analysis is stark: “Traceable coffee is only possible with an estimated 10% of Ugandan producers” given its 1.8 million smallholder farming households.

A Stanford-led review concludes that “despite zero-deforestation commitments, high rates of deforestation persist” and that “supply chain initiatives only cover a small share of tropical deforestation” (Lambin & Furumo, 2023). Wageningen University researchers examining Cameroon and Ethiopia warn that “smallholder farmers may face greater challenges than currently anticipated by the EU” due to “limited awareness and infrastructural gaps that hinder traceability” (Ten Hove et al., 2025).

The traders who solve this traceability gap will maintain their EU market access. Those who don’t risk being cut off from Europe’s €8 billion coffee market — or facing penalties of up to 4% of EU turnover.

  • What can traders do now?

With 12 months until enforcement, the window for preparation is narrowing. Practical steps include auditing your supply chain exposure to identify which suppliers and origins lack plot-level geolocation data, engaging with origin-country traceability initiatives such as Uganda’s National Traceability System, and evaluating compliance technology partners.

  • A note on validation

Full disclosure: I’m the founder of ProofSource, a coffee traceability platform being developed for EUDR compliance. But I’m sharing this analysis because the problem is real and urgent — regardless of which solution traders ultimately choose.
We’re currently in validation mode, offering free 30-day EUDR Readiness Assessments to coffee exporters and traders. This diagnostic service maps your supply chain exposure, identifies traceability gaps, and delivers a personalised compliance roadmap — before we build our full platform. We believe in testing whether the market truly needs what we’re building before we build it. Request your assessment at proofsource.vercel.app

Building the complete solution — particularly the satellite verification infrastructure needed to verify deforestation-free status at scale — requires significant investment. We’re actively seeking partnerships with climate-focused research institutions, coffee industry funds, and innovation programmes in the Gulf region who share our mission of protecting smallholder market access while preventing deforestation.

If you’re a Dubai- or Abu Dhabi-based trader wanting to understand your EUDR exposure, or a research institution interested in collaborating on coffee supply chain traceability, I welcome the conversation.

The December 2026 deadline will arrive faster than anyone expects. The traders who act now will be positioned to maintain their European market access. Those who wait may find themselves scrambling — or shut out entirely.

Raymond Reuel Wayesu is the founder of ProofSource and a PhD candidate in machine learning and computer vision for agriculture.
Contact: [email protected] | [email protected]

The New Global Coffee Order: Major Transformations Shaping the Industry’s Future

Posted on by Qahwa World

Dubai – Qahwa World

The coffee industry is witnessing an unprecedented transformation, reshaping itself under pressures that span climate, economics, trade, and consumer behavior. The World Coffee Portal’s recent two-part analytical study, titled “Coffee’s New World Order”, provides a deep dive into these sweeping changes, offering a comprehensive view of how the global coffee system is evolving before our eyes.

Climate Pressures and Production Volatility

Global coffee production is now more vulnerable than ever. In 2025, Brazil, the world’s largest arabica producer, faced severe heatwaves and erratic rainfall, pushing arabica prices to historic highs. Meanwhile, Vietnam, a key robusta supplier, suffered prolonged droughts that impacted yields, raising the cost of instant coffee ingredients to levels unseen in nearly half a century.

These climate challenges are compounding existing market pressures. Futures markets, historically driven by stable inventory practices, are now in backwardation, discouraging stockpiling and amplifying shortages. As a result, the world is seeing unprecedented fluctuations in both commodity prices and availability, affecting roasters, exporters, and consumers alike.

Trade Policies and Global Ripple Effects

Recent trade developments have intensified the industry’s volatility. When the United States imposed significant tariffs on Brazilian coffee, supply chains were forced to adapt quickly. European and Asian markets absorbed redirected volumes, leading Germany to surpass the US as Brazil’s largest export destination. Meanwhile, China has actively expanded imports to secure long-term supply for its growing domestic chains, including large-scale deals by regional players to stock thousands of stores.

These developments illustrate that coffee is no longer a commodity confined to traditional trade patterns. Instead, it is part of a dynamic, multi-polar market, where emerging economies increasingly influence global flows, pricing, and strategies.

Consumer Trends and Emerging Markets

The World Coffee Portal study emphasizes that consumption patterns are shifting globally. Asia, the Middle East, and Latin America are no longer passive markets. Local brands are rapidly innovating, offering products tailored to regional tastes, from fruit-infused coffee drinks to digital-first ordering experiences. These trends challenge legacy Western models of expansion, demonstrating that global dominance in coffee is no longer guaranteed by scale alone.

Specialty Coffee Under Pressure

Specialty coffee, long seen as insulated from commodity pressures, now faces both opportunities and risks. Automation and technological advances can reduce operational costs, but the premium coffee segment must balance quality, exclusivity, and affordability. Experts highlight that consumer expectations remain high; price increases must be justified by superior flavor, traceability, and experience. The premium market’s future will hinge on its ability to navigate these competing demands.

Sustainability and Climate Resilience

With 70% of global coffee produced by smallholders, sustainability is central to industry stability. Climate resilience, yield improvements, and farmer support are critical to safeguarding the coffee supply chain. While development aid has declined, private sector initiatives and collaborative programs—such as G7-backed funds and proposed levies on green coffee—are emerging as essential mechanisms to ensure long-term sustainability.

The End of Cheap Coffee?

The era of inexpensive, untraceable coffee is drawing to a close. Rising costs, climate impacts, and supply chain disruptions are driving prices upward, even as global demand remains robust. Consumers may pay more, but the industry is evolving toward efficiency, transparency, and collaboration, creating a new paradigm for how coffee is grown, traded, and consumed worldwide.

The World Coffee Portal’s study offers a rare and detailed glimpse into this evolving global landscape, providing essential insights for industry leaders, traders, and enthusiasts alike. The global coffee order is changing—and those who adapt quickly will define the next era of the industry.

AI and Sustainability Redefine the Future of Coffee Trade

Posted on by Qahwa World

Dubai – Qahwa World

The “Future of Trade 2024: Decoupled and Reconfigured” report released by the Dubai Multi Commodities Centre (DMCC) offers a forward-looking view of how global trade is transforming amid economic, environmental, and technological change.
Although coffee trade is not discussed in detail, the report’s three defining forces — regionalisation, digitalisation, and sustainability — have direct implications for the global coffee industry and its complex supply chain stretching from farms to roasters.

Regionalisation and the Reconfiguration of Supply Chains

The report forecasts that global trade will rebound moderately, growing by 2.6% in 2024 and 3.3% in 2025, after contracting by 1.2% in 2023.
This recovery, however, comes with an important shift: the world is moving toward regionalised trade blocs and “friend-shoring,” in which supply chains are relocated closer to politically aligned or geographically proximate partners.

In the coffee sector, this means supply routes and logistics networks are being redrawn. Neutral hubs such as Dubai are expected to gain importance as aggregation and re-export centres for coffee shipments heading to Europe, Asia, and Africa.
With the total value of global merchandise trade reaching US$31 trillion in 2023, competition among trading hubs to attract high-value commodities, including coffee, is intensifying.

Sustainability: From Compliance to Market Advantage

The DMCC report highlights the rapid rise of climate policy as a trade determinant, particularly with the introduction of the EU Carbon Border Adjustment Mechanism (CBAM).
This system is redefining competitiveness by penalising carbon-intensive exports and rewarding those with low emissions and traceable supply chains.

While services trade is growing by 9% compared to 6% for goods, agricultural producers — especially in coffee — face mounting pressure to meet environmental standards and prove compliance with deforestation-free regulations.
Those who succeed can access the so-called “green premium”, where verified sustainable coffees command higher prices in European markets.

Within this context, Dubai’s advanced infrastructure and regulatory environment position it as a gateway for sustainability-compliant trade.
According to DMCC’s Commodity Trade Index 2024, the United States ranks first, followed by the United Arab Emirates and Switzerland, confirming Dubai’s role as one of the world’s top three commodity trading hubs — a ranking that reinforces its potential as a major coffee re-export platform.

Digitalisation and Artificial Intelligence: The New Engine of Coffee Trade

The report identifies artificial intelligence (AI) as the single most transformative force in global commerce.
In the coffee industry, AI can optimise pricing, logistics, and quality control — analysing weather data, yield forecasts, and logistics variables to improve risk management and profitability.

AI-driven blockchain traceability systems are also reshaping trust across the supply chain, giving roasters and buyers greater visibility from origin to cup.
At the same time, trade documentation and payments are moving toward full automation, making transactions faster and less costly.

The report further projects that B2B e-commerce will grow by 14.5% through 2026, while digital services exports reached US$3.82 trillion with annual growth of 8%.
For coffee producers and roasters, this trend opens the door to direct online trade platforms that bypass intermediaries and enhance market access for certified coffees.

Trade Finance and the Credit Gap

DMCC underscores a global trade finance gap of US$2.5 trillion, a shortfall that disproportionately affects small exporters and agricultural producers.
In coffee-producing regions, this financing gap often limits the ability of cooperatives and smallholders to meet environmental or certification requirements.

Innovative financial instruments such as Supply Chain Finance (SCF) can bridge this divide by linking credit access to verified sustainability and traceability metrics — offering incentives for producers who adopt transparent and climate-friendly practices.

Dubai’s Growing Role in Sustainable Coffee Trade

Thanks to its strategic location, world-class logistics, and neutral trade environment, Dubai is strengthening its position as a central hub for global commodities.
The city is rapidly becoming a key centre for sustainable coffee re-export, supported by free zones that offer packaging, lab testing, and digital traceability services.
These capabilities align with the UAE’s broader vision of building a diversified and green economy, where technology and sustainability define the next era of trade.

Key Numbers from the Report

Global trade growth: +2.6% (2024), +3.3% (2025)

Value of merchandise trade: US$31 trillion (2023)

Services trade growth: +9% vs. +6% for goods

Trade finance gap: US$2.5 trillion

Top commodity hubs: 1. USA, 2. UAE, 3. Switzerland

B2B e-commerce growth: +14.5% through 2026

Digital service exports: US$3.82 trillion

The Road Ahead

As global trade becomes increasingly regionalised, sustainable, and data-driven, the coffee industry stands at a pivotal juncture.
Those who can embrace technology, achieve sustainability compliance, and diversify their trade networks will not only survive but thrive in this evolving landscape.
Amid this transformation, Dubai continues to bridge continents — linking coffee origins in Africa and Latin America with fast-growing consumer markets across Europe, Asia, and the Middle East.

JDE Peet’s Calls on Coffee Industry to Embrace Regenerative Agriculture Roadmap

Posted on by Qahwa World

Amsterdam – Qahwa World

On International Coffee Day, JDE Peet’s (EURONEXT: JDEP) marked the tenth anniversary of its Common Grounds farmer programmes with a strong call for the global coffee industry to implement the Regenerative Agriculture Coffee Roadmap. The company stressed that urgent action is needed to secure the future of coffee as climate change continues to disrupt production through unseasonal weather, rising temperatures, and shifting rainfall patterns.

Laurent Sagarra, Vice President of Engagement at JDE Peet’s, said that resilient supply chains benefit everyone, from consumers and companies to farmers themselves. He noted that the company has already reached nearly one million farmers over the past decade, but warned that the scale of climate risk demands faster, collective action. “We cannot wait another century to support the millions of farmers who still need help,” he said. “The time to act is now.”

JDE Peet’s farmer programmes, launched in 2015 as part of the company’s Common Grounds sustainability strategy, aim to strengthen coffee-growing communities by promoting regenerative agriculture, improving farmer livelihoods, and fostering thriving coffee regions. Using a data-driven approach verified by independent assessments, the programmes have already made measurable progress. More than 835,000 farmers in 29 countries have benefited, half of the farms involved have adopted regenerative practices such as soil management and water conservation, and 83.2 percent of the company’s green coffee is now responsibly sourced worldwide, including 100 percent in Europe.

The roadmap JDE Peet’s is urging the industry to adopt outlines proven regenerative practices that can reduce greenhouse gas emissions, restore ecosystems, and boost coffee production. Studies suggest that supporting farmers to transition could increase global coffee exports by 30 percent, improve the incomes of more than three million smallholder farmers, and cut emissions by 3.5 million tons of CO₂e annually.

With 12.5 million coffee farmers worldwide, many managing less than one hectare of land, the company underlined that the challenges cannot be met by one player alone. As it celebrates ten years of engagement with farmers, JDE Peet’s is pressing the entire industry to join forces in ensuring that coffee has a sustainable and resilient future.