Tag: EU deforestation regulation

Dr. Steffen Schwarz: EUDR Simplification Remains an Administrative Monster

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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?

 

 

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

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

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

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

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

Background and Legal Context

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

The Simplification Package – Four Key Pillars

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

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

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

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

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

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

Summary of HS Code Changes

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

New Information System – Grouping Feature and Contingency Plan

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

Operator Categorisation – Three Tiers, Different Obligations

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

Low-Risk Countries – Geolocation Not Waived

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

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

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

Global Law Repository and Proportionate Evidence

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

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

US Reaction – $9 Billion in Exports at Risk

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

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

Conclusion

In the final analysis, the European simplification package brought:

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

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

❓ Frequently Asked Questions (FAQ)

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

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

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

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

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

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

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

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

European Commission Expands EUDR Scope to Include Soluble Coffee

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Dubai – Qahwa World

The European Commission has unveiled a new package of measures aimed at simplifying the implementation of the EU Deforestation Regulation (EUDR), while also expanding the regulation to include soluble coffee.

The announcement brings greater clarity to a regulation that has faced repeated delays since it was first proposed in 2021. The EUDR officially entered into force in 2023 and was initially scheduled to apply by the end of 2024. However, concerns from industries and producing countries over preparedness and compliance requirements led to multiple postponements.

The Commission now says it is focused on ensuring the regulation becomes fully operational by 30 December 2026.

As part of the latest revisions, EU officials estimate the simplification measures could lower annual compliance and administrative costs for affected companies by approximately 75 per cent compared with the original framework.

For the coffee sector, one of the most significant developments is the decision to add soluble coffee to the regulation’s scope. Industry representatives believe the move will create more consistent rules across coffee categories and strengthen fair competition within the European market.

Eileen Gordon-Laity, Secretary General of the European Coffee Federation, said the inclusion of soluble coffee would support equal treatment across the sector while reinforcing the environmental objectives of the regulation. She noted that aligned requirements are important for companies preparing for compliance ahead of the implementation deadline.

The updated package also includes changes to the EUDR digital system, with simplified paperwork requirements for smaller producers such as farmers and foresters.

Meanwhile, companies placing products on the market for the first time, including coffee roasters and major importers, will continue to face full due diligence obligations. Businesses further down the supply chain will mainly be responsible for collecting supplier reference numbers rather than independently verifying compliance.

The Commission also proposed removing leather and retreaded tyres from the regulation’s scope. Certain packaging materials, waste products, and product samples would also receive exemptions. In addition, several palm oil derivatives are expected to be added alongside soluble coffee.

Environmental groups have called on the European Union to avoid further delays in implementing the law. Anke Schulmeister-Oldenhove from WWF’s European Policy Office said the regulation must now move from discussion to action, warning that continued postponements could weaken both enforcement efforts and environmental credibility.

The draft Delegated Act is open for public feedback until 1 June 2026.

 

Why Dubai Coffee Traders Must Prepare for EUDR now?

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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]

EU Eases EUDR Rules to Ensure Smooth Rollout by 2025

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Brussels – Qahwa World

The European Commission has announced adjustments to the EU Deforestation Regulation (EUDR) aimed at ensuring its timely implementation by 30 December 2025. The changes include lighter reporting requirements, deadline extensions for small businesses, and simplified due diligence obligations to reduce administrative complexity and IT system strain.

The EUDR, which targets commodities linked to deforestation such as coffee, cocoa, palm oil, paper, and wood, will require importers to prove that their products have not contributed to forest degradation anywhere in the world after 31 December 2020. Initially scheduled for December 2024, the regulation was postponed by one year to give coffee producers and other stakeholders additional time to comply.

Under the updated proposal introduced on 21 October 2025, micro and small enterprises will receive an additional 12-month extension to 30 December 2026. Large and medium-sized companies must still meet the 30 December 2025 deadline but will benefit from a six-month grace period for checks and enforcement. To streamline the process, the Commission will now require only a single due diligence statement across a product’s entire supply chain, easing the burden for businesses and simplifying data management within the EU’s internal systems.

The revised framework maintains that “upstream” operators—those first placing regulated commodities on the EU market—will continue to exercise due diligence. “Downstream” operators, typically traders handling products already imported into the EU, will no longer be obligated to submit separate compliance statements.

Environmental groups have cautiously welcomed the move, seeing it as a pragmatic step to avoid further delays, though some have expressed concern that the changes could weaken the regulation’s impact. “We reiterate our call to address the specific challenges millions of smallholders face in producing EUDR-compliant products and the disproportionate burden placed on their shoulders,” the Rainforest Alliance said in a statement.

The WWF offered a stronger critique, calling the decision “a shameful surrender to political pressure.” Anke Schulmeister-Oldenhove, Senior Forest Policy Officer at WWF, said the Commission’s reference to IT system issues “feels like a perfect scapegoat to water down the regulation.”

The proposed amendments will still need formal approval by the European Parliament and the European Council before implementation. If adopted, they would mark a significant shift in how the EU enforces environmental due diligence, with major implications for global trade in deforestation-linked commodities, including 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.

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.

EU Confirms Delay to Deforestation Regulation

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Brussels – Qahwa World

The European Commission has confirmed a further one-year delay to the European Union Deforestation Regulation (EUDR), citing IT system capacity issues and risks of disruption to supply chains.

The regulation, which entered into force in June 2023, sets strict due diligence requirements for commodities including palm oil, cattle, soy, coffee, cocoa, timber, rubber, and derived products such as beef, furniture, and chocolate. Originally scheduled for application from December 30, 2024, implementation was already postponed once to December 2025. The new proposal extends the deadline by an additional 12 months.

“While our simplification efforts have been substantial, we have concluded that we cannot meet the original deadline without causing disruptions to our businesses and supply chains,” said European Commission trade spokesperson Olof Gill. He added that the IT platform designed to handle compliance documentation faces “serious capacity concerns given the projected load.”

Environment Commissioner Jessika Roswall stressed that the delay provides “the necessary time to get the IT system capacity that we need.” She also rejected suggestions that the decision was linked to ongoing trade talks with the United States or Indonesia, noting that the U.S. has already been recognized as posing “negligible risk” to global deforestation.

The proposal must now be approved by EU member states and the European Parliament.

The delay was welcomed by the European People’s Party (EPP), parliament’s largest group, which has long argued the regulation placed disproportionate burdens on small and medium-sized businesses, including coffee roasters, foresters, and farmers. “If the deforestation regulation had entered into force unchanged on 1 January, it would have caused unsolvable problems,” said EPP environment spokesperson Peter Liese.

Christine Schneider, the parliament’s lead negotiator on EUDR, called for a “zero-risk category” to exempt commodities and regions with no deforestation link from additional documentation requirements.

However, environmental organizations sharply criticized the move. The WWF described the delay as “a massive embarrassment for President von der Leyen and her Commission,” warning it reflects a lack of political will to ensure timely enforcement. The Greens’ agriculture coordinator Thomas Waitz called it “a dark day for global forest protection,” accusing the Commission of bowing to pressure from the agricultural and sawmill lobbies.

The Commission’s decision underscores a broader trend of prioritizing industrial competitiveness over environmental regulation. Earlier this year, a majority of EU members had already urged postponement. Critics fear that repeated delays undermine the EU’s credibility as a leader in global climate and forest protection efforts.

The debate also resonates with global commodity markets, from agriculture and biofuels to biomass and petrochemicals, where compliance costs, supply chain transparency, and IT readiness remain pressing concerns.

Ethiopian Coffee Farmers Face Heavy Burden from New EU Regulations

Posted on by Qahwa World

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.

Shade-Grown Coffee Farms Store More Carbon Than Tree-Planting Projects, Study Finds

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Dubai, August 19, 2025 – (Qahwa World) – A landmark study has revealed that carbon markets are overlooking the most effective climate solution in coffee farming: protecting mature shade-grown coffee systems.

The research, led by the Smithsonian’s National Zoo and Conservation Biology Institute (NZCBI) and Smithsonian Tropical Research Institute (STRI), and published in Communications Earth & Environment, concludes that current carbon-payment schemes undervalue shade-grown farms. While farmers are rewarded for planting new trees, they receive no compensation for conserving existing shade trees, even though these trees store more than twice the carbon of new plantings.

Globally, coffee farms cover more than 10 million hectares. Systems range from intensive monocultures in full sun to agroforestry farms where coffee grows under canopies of diverse native trees. These shade trees regulate climate, provide habitat for wildlife, and store vast amounts of carbon. But under current carbon markets, only new tree-planting projects generate tradable credits. Farmers who maintain mature shade systems receive nothing, creating an incentive to cut old trees to plant new ones that qualify for payments.

“There is a lot of money behind planting trees on degraded coffee farms, yet there are basically no financial incentives—outside of Bird Friendly® certification—to protect standing shade trees,” said Dr. Ruth Bennett, ecologist at NZCBI and senior author of the study.

Shade Trees vs. Tree Planting

The team analyzed 67 field-based studies across Latin America, Africa and Asia, then modeled carbon storage across global coffee landscapes. They estimated that coffee farms currently store 481.6 million metric tons of carbon above ground.

Two contrasting scenarios were tested. If all sun-grown farms added shade trees, they would capture 82–87 million additional metric tons of carbon. But if existing shade-grown systems were converted into monocultures, the world could lose 174–221 million metric tons—more than double the potential gains from planting.

This imbalance exposes a fundamental flaw in current climate strategies. Shade-grown systems, which evolved over centuries, already represent vast stores of carbon. Removing them in pursuit of “new” tree-planting credits risks releasing far more carbon than could ever be recaptured.

Shade systems are also vital for biodiversity. Prior studies have shown that shade-grown coffee farms host up to four times more bird species than monocultures. Yet biodiversity outcomes don’t always align with carbon goals. Tree density improves carbon storage, while tree diversity supports wildlife. Carbon-focused projects often emphasize density, planting fast-growing monocultures that fail to deliver ecological benefits.

“If we don’t prioritize biodiversity in carbon projects, it won’t happen by accident,” said Dr. Emily Pappo, lead author and postdoctoral climate fellow at the Smithsonian. “Coffee companies must plant the right mix of trees—not just the most carbon-hungry species.”

Climate and Market Implications

Farmers are caught between climate pressures and market demands. Many remove shade trees in hopes of boosting yields, even though shade has been shown to stabilize production by regulating temperature and soil moisture. Meanwhile, large coffee companies invest heavily in tree-planting projects to meet corporate climate targets. Without incentives to conserve existing shade systems, these investments risk undermining their own objectives.

The economic stakes are significant. Coffee contributes an estimated $200 billion annually to the global economy. With the European Union’s Deforestation Regulation (EUDR) coming into force, companies face new requirements to prove that their supply chains are deforestation-free. Shade-grown systems that conserve habitat and store carbon could become critical to compliance as well as climate resilience.

The study’s authors argue for urgent policy change. They call for carbon markets to evolve by creating “protection credits” that reward conserving existing shade systems, not only planting new trees. They also recommend tree-planting initiatives that emphasize diversity rather than density, ensuring that biodiversity and carbon storage go hand in hand.

To support farmers, the Smithsonian team is developing a “Shade Catalog”, a resource to guide the selection of tree species that balance productivity, biodiversity, and carbon storage. Combined with certification schemes such as Bird Friendly®, these tools can help farmers access premium markets while conserving ecosystems.

Ultimately, the research reframes climate-smart coffee strategies. Planting trees remains a positive step, especially in degraded monoculture regions, but it cannot replace what is lost when mature shade systems are destroyed. Protecting existing forests delivers greater and more immediate benefits for both the planet and the coffee sector.

As Dr. Bennett concluded: “Tree planting has value, but our findings show it cannot make up for what you lose when mature shade trees are removed.”