Tag: robusta

Coffee Prices Fall on Improved Brazil Crop Prospects

Posted on by Qahwa World
Author: Qahwa World
Source: Barchart
Date: May 20, 2026
Executive Summary:

  • July arabica coffee closed down 0.68% on Wednesday, while July robusta fell 0.51% to a one month low.
  • Arabica hit a one and a half year low on Tuesday amid an improved global supply outlook.
  • The Coffee Trading Academy projects Brazil’s 2026/27 harvest will increase 12% year on year to 71.4 million bags.
  • Marex Group and StoneX both forecast record Brazilian crops above 75 million bags for 2026/27.
  • StoneX projects the 2026 global coffee surplus will expand to 10 million bags, the largest in six years.
  • Vietnam coffee exports rose 15.8% in the first four months of 2026, reaching 810,000 metric tons.
  • ICE robusta inventories hit a two year low last Friday but recovered slightly on Wednesday.

Coffee prices settled lower on Wednesday, May 20, 2026, with robusta falling to a one month low. Expectations of a larger Brazilian coffee crop continue to weigh on prices. July arabica coffee futures closed down 0.68%, and July ICE robusta coffee closed down 0.51%.

Prices have ratcheted lower over the past month, with arabica falling to a one and a half year near term low on Tuesday amid an improved global supply outlook. On May 7, the Coffee Trading Academy projected Brazil’s 2026/27 coffee harvest would increase 12 percent year on year to 71.4 million bags. On March 19, Marex Group projected a record Brazilian crop of 75.9 million bags, surpassing Sucafina’s forecast of 75.4 million bags. On March 12, StoneX raised its Brazil 2026/27 production estimate to a record 75.3 million bags, up from a November estimate of 70.7 million bags. StoneX also projected the 2026 global coffee surplus would expand to 10 million bags from 1.8 million bags in 2025, the largest surplus in six years.

Vietnam Exports and ICE Inventories

Soaring coffee exports from Vietnam, the world’s largest robusta producer, are bearish for robusta prices. On May 9, Vietnam’s National Statistics Office reported that the country’s coffee exports in the first four months of 2026 rose 15.8 percent year on year to 810,000 metric tons. Vietnam’s 2025 coffee exports jumped 17.5 percent to 1.58 million metric tons. Production for the 2025/26 season is projected to climb 6 percent to a four year high of 1.76 million metric tons, equivalent to 29.4 million bags.

ICE coffee inventories have trended lower over the past two months, which typically supports prices. ICE robusta inventories fell to a two year low of 3,631 lots last Friday, though they recovered to a two and a half week high of 3,845 lots on Wednesday. ICE arabica coffee inventories fell to a two and three quarter month low of 456,462 bags on Wednesday.

Brazil Exports and Supply Disruptions

Smaller exports from Brazil are supportive of coffee prices. Last Tuesday, Cecafe reported that Brazil’s April green coffee exports fell 1.3 percent year on year to 2.76 million bags. The ongoing closure of the Strait of Hormuz has disrupted global coffee supplies and is bullish for prices. The closure has tightened supplies by increasing shipping rates, insurance, fertilizer and fuel costs, raising costs for importers and roasters.

As a bearish factor, the International Coffee Organization reported on November 7 that global coffee exports for the current marketing year (October to September) fell 0.3 percent year on year to 138.658 million bags.

USDA Production Forecasts

Indicator 2025/26 Forecast
World coffee production 178.848 million bags (+2.0% y/y record)
Arabica production 95.515 million bags (-4.7% y/y)
Robusta production 83.333 million bags (+10.9% y/y)
Brazil production 63 million bags (-3.1% y/y)
Vietnam production 30.8 million bags (+6.2% y/y, 4 year high)
Ending stocks 20.148 million bags (-5.4% y/y)

The USDA’s Foreign Agriculture Service bi-annual report of December 18 projected that world coffee production in 2025/26 would increase 2.0 percent year on year to a record 178.848 million bags. Within that total, arabica production is expected to decrease 4.7 percent to 95.515 million bags, while robusta production is forecast to rise 10.9 percent to 83.333 million bags. The USDA also forecast Brazil’s 2025/26 coffee production would decline 3.1 percent to 63 million bags, while Vietnam’s output would rise 6.2 percent to a four year high of 30.8 million bags. Ending stocks for 2025/26 are projected to fall 5.4 percent to 20.148 million bags from 21.307 million bags in 2024/25.

Frequently Asked Questions (FAQ)

1. Why are coffee prices falling?

Coffee prices are under pressure mainly due to expectations of a larger Brazilian coffee crop for 2026/27 and surging exports from Vietnam, pointing to a global surplus.

2. How low did arabica coffee prices go?

July arabica coffee futures fell to a one and a half year low on May 19, 2026, closing down 0.68% on May 20.

3. What is the projected Brazilian coffee crop for 2026/27?

The Coffee Trading Academy projects 71.4 million bags, while Marex Group and StoneX project record crops above 75 million bags.

4. How much did Vietnam’s coffee exports increase?

Vietnam’s coffee exports rose 15.8 percent in the first four months of 2026 compared to the same period last year, reaching 810,000 metric tons.

5. What is the expected global coffee surplus for 2026?

StoneX projects the 2026 global coffee surplus will expand to 10 million bags, the largest surplus in six years.

6. How does the Strait of Hormuz closure affect coffee prices?

The closure disrupts global coffee supplies by increasing shipping rates, insurance, and fuel costs, which is a bullish factor supporting prices.

Qahwa World – Based on Barchart commodity bulletin.
Published: May 20, 2026

Tanzania Coffee Production to Rise 10 Percent in 2026/27

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

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

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

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

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

Crop Area Expansion

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

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

Production and Inputs

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

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

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

Policy and Trade

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

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

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

Export Destinations and Soluble Coffee Decline

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

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

Domestic Consumption and Stocks

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

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

Frequently Asked Questions (FAQ)

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

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

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

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

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

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

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

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

5. How is domestic coffee consumption changing in Tanzania?

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

6. Why are ending stocks expected to increase sharply?

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

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

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

Posted on by Qahwa World

Author: Qahwa World – London

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

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

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

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

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

Price performance by group and futures markets

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

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

Strait of Hormuz blockage: a lasting impact on input costs

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

Global supply outlook improves – market forecasts point to larger crops

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

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

Price differentials and arbitrage

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

Volatility declines across all indicators

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

Certified stocks remain at historic lows

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

Green bean exports: mixed performance by group

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

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

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

Total exports by region (all forms of coffee)

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

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

Exports by form: soluble coffee up 6.6%

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

Global supply/demand balance

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

Frequently Asked Questions

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

Related Stories:

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ICO February 2026 Report: Has the Inflationary Wave Receded?

Global Coffee Market Roadmap—January 2026

ICO Releases Global Coffee Market Report – December 2025

 

Indonesian Coffee Output Drops 8% to 11.38 Million Bags

Posted on by Qahwa World

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

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

1. Overview: Indonesia in the Global Coffee Market

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

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

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

2. Production Forecast: MY 2026/27

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

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

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

3. Climate Challenges: Rains and Typhoon Damage

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

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

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

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

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

4. Yield Projections

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

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

5. Price Dynamics: Decline from 2025 Peaks

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

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

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

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

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

6. Export Outlook: Lower Supplies, Stronger European Demand

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

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

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

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

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

7. Trade Agreements and Policy Environment

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

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

8. Domestic Consumption: A Growing Market

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

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

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

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

9. Long-Term Vision and Recovery Outlook

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

10. Imports: Filling the Gap

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

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

11. Key Challenges Facing Indonesian Coffee Sector

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

12. Opportunities

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

Frequently Asked Questions

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

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

  • Why is Robusta production expected to decline?

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

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

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

  • How have coffee prices changed in Indonesia?

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

  • What are Indonesia’s main coffee export markets?

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

  • How much coffee does Indonesia consume domestically?

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

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

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Coffee Prices Decline as Expectations of Ample Brazilian Crop Weigh on Market

Posted on by Qahwa World
Author: Qahwa World
Source: Barchart (Rich Asplund)
Date: May 18, 2026 Coffee prices decline ample supplies is the main story as the market experiences significant changes.
Executive Summary:

  • July arabica coffee fell to a 1.5 year low on Monday, closing down 1.01 percent. July robusta posted a 4 week low, closing down 1.75 percent.
  • The Coffee Trading Academy projects Brazil’s 2026/27 harvest will increase 12 percent year on year to 71.4 million bags.
  • Marex Group and StoneX both forecast record Brazilian crops exceeding 75 million bags for 2026/27.
  • StoneX projects the 2026 global coffee surplus will expand to 10 million bags, the largest in six years.
  • Vietnam coffee exports rose 15.8 percent in the first four months of 2026 compared to the same period last year.
  • ICE robusta inventories fell to a two year low last Friday, while arabica inventories dropped to a 2.75 month low.
  • The closure of the Strait of Hormuz continues to disrupt global coffee supplies, supporting prices.

Coffee prices extended their sharp losses from last Friday on May 18, 2026. July arabica coffee futures closed down 1.01 percent, reaching a one and a half year low. July robusta coffee fell 1.75 percent, hitting a four week low. The declines were driven largely by expectations of a larger Brazilian coffee crop and surging exports from Vietnam.

Market analysts are forecasting a record harvest in Brazil for the 2026/27 season. On May 7, the Coffee Trading Academy projected Brazil’s crop would increase 12 percent year on year to 71.4 million bags. Earlier forecasts from Marex Group and StoneX were even higher. Marex projected a record 75.9 million bags, while StoneX raised its estimate to 75.3 million bags. StoneX also predicted that the global coffee surplus would expand from 1.8 million bags in 2025 to 10 million bags in 2026, the largest surplus in six years.

Vietnam, the world’s largest robusta producer, is also adding to supply pressure. According to Vietnam’s National Statistics Office, coffee exports in the first four months of 2026 rose 15.8 percent year on year to 810,000 metric tons. For the full year 2025, Vietnam’s coffee exports jumped 17.5 percent to 1.58 million metric tons. Production for the 2025/26 season is projected to climb 6 percent to a four year high of 1.76 million metric tons, equivalent to 29.4 million bags.

Inventories and Supply Disruptions

ICE coffee inventories have trended lower over the past two months, which typically supports prices. ICE robusta inventories fell to a two year low of 3,631 lots last Friday. ICE arabica coffee inventories dropped to a 2.75 month low of 462,777 bags on Monday. Despite these declines, the broader supply outlook remains bearish.

Meanwhile, smaller exports from Brazil are providing some support. On May 12, Cecafe reported that Brazil’s April green coffee exports fell 1.3 percent year on year to 2.76 million bags. Additionally, the ongoing closure of the Strait of Hormuz has disrupted global coffee supplies. The closure has increased shipping rates, insurance costs, fertilizer and fuel prices, raising costs for coffee importers and roasters. This factor remains bullish for prices.

Key Market Data

Indicator Value
July arabica coffee close (May 18) Down 1.01% to 1.5 year low
July robusta coffee close (May 18) Down 1.75% to 4 week low
Brazil 2026/27 crop forecast (Coffee Trading Academy) 71.4 million bags (+12% y/y)
Brazil 2026/27 crop forecast (Marex Group) 75.9 million bags (record)
Brazil 2026/27 crop forecast (StoneX) 75.3 million bags (record)
Projected 2026 global coffee surplus 10 million bags (largest in 6 years)
Vietnam coffee exports (Jan-Apr 2026) 810,000 MT (+15.8% y/y)
ICE robusta inventories (May 15) 3,631 lots (2 year low)
ICE arabica inventories (May 18) 462,777 bags (2.75 month low)

Global Export and Production Outlook

On November 7, the International Coffee Organization reported that global coffee exports for the current marketing year (October to September) fell 0.3 percent year on year to 138.658 million bags. This decline is a bearish factor for prices.

The USDA Foreign Agriculture Service released a bi-annual report on December 18 projecting that world coffee production in 2025/26 would increase 2.0 percent year on year to a record 178.848 million bags. Within that total, arabica production is expected to decrease 4.7 percent to 95.515 million bags, while robusta production is forecast to rise 10.9 percent to 83.333 million bags. The USDA also forecast that Brazil’s 2025/26 coffee production would decline 3.1 percent to 63 million bags, while Vietnam’s output would rise 6.2 percent to a four year high of 30.8 million bags. Ending stocks for 2025/26 are projected to fall 5.4 percent to 20.148 million bags from 21.307 million bags in 2024/25.

Frequently Asked Questions (FAQ)

1. Why are coffee prices falling?

Coffee prices are under pressure mainly due to expectations of a larger Brazilian coffee crop for 2026/27 and surging exports from Vietnam, which point to a global surplus.

2. How low did arabica coffee prices go?

July arabica coffee futures fell to a one and a half year low on May 18, 2026, closing down 1.01 percent.

3. What is the projected Brazilian coffee crop for 2026/27?

Forecasts vary, but the Coffee Trading Academy projects 71.4 million bags, while Marex Group and StoneX project record crops above 75 million bags.

4. How much did Vietnam’s coffee exports increase?

Vietnam’s coffee exports rose 15.8 percent in the first four months of 2026 compared to the same period last year, reaching 810,000 metric tons.

5. What is the expected global coffee surplus for 2026?

StoneX projects the 2026 global coffee surplus will expand to 10 million bags, the largest surplus in six years.

6. How does the Strait of Hormuz closure affect coffee prices?

The closure disrupts global coffee supplies by increasing shipping rates, insurance, and fuel costs, which is a bullish factor supporting prices.

Qahwa World – Based on market reports from Barchart by Rich Asplund.
Published: May 18, 2026

Mexico Coffee Production Forecast to Reach 4.1 Million Bags in 2026/2027

Posted on by Qahwa World
Author: Qahwa World – Dubai
Source: USDA Foreign Agricultural Service – Mexico City Office
Report Number: MX2026-0026
Date: May 14, 2026
Executive Summary

  • Mexico coffee production forecast at 4.1 million green bean equivalent bags for MY 2026/2027
  • Production expected to increase 1 percent year-over-year driven by robusta expansion
  • Mexican coffee consists of 85 percent arabica and 15 percent robusta
  • Chiapas, Veracruz, and Puebla account for more than 80 percent of national production
  • Domestic consumption projected to rise 1 percent to 3.2 million bags
  • United States remains primary destination for Mexican coffee exports
  • Soluble coffee covers approximately 60 percent of domestic consumption

The USDA Foreign Agricultural Service forecasts Mexico coffee production for marketing year 2026/2027 at 4.1 million green bean equivalent bags, a 1 percent increase from the previous year. This marginal growth is driven by sustained investment following two years of favorable market prices and the continued expansion of robusta production.

Mexican coffee production consists of 85 percent arabica and 15 percent robusta. The three main producing states are Chiapas, Veracruz, and Puebla, which together account for more than 80 percent of national output.

Production outlook by region

Chiapas is forecast to remain the top coffee-producing state by volume in MY 2026/2027. Puebla is expected to have the highest yields at 13 green bean equivalent bags per hectare, more than double the national average. This exceptional performance is due to favorable soil conditions, investments in leaf-rust resistant plants, and infrastructure near major cities. Veracruz ranks as the second highest yielding state.

Despite a decline from 2025 peaks, coffee prices in early 2026 continue to trend well above historical averages. According to the International Coffee Organization, arabica prices averaged 331 US cents per pound as of March 2026, which is 40 percent above the ten-year average.

This extended period of profitability has enabled producers in Chiapas, Veracruz, and Puebla to reinvest in farm management. Growers have increased plant density, input application, and quality control measures. The adoption of new varieties resistant to coffee leaf rust is forecast to continue growing the sector without expanding planted area.

Key insight: Following years of widespread coffee leaf rust outbreaks, Mexican producers have gradually transitioned toward replanting arabica rust-resistant varieties. These plants are currently in their early growth stages and have yet to fruit, but they are expected to lay the foundation for a more resilient and productive sector in the coming years.

Robusta expansion

Mexico is expanding robusta production due to its resilience against disease, ability to thrive in lower-altitude climates, and demand from large soluble coffee processors. According to industry contacts, large-scale processors have prioritized local sourcing. They provide robusta farmers with contract agreements and price stability. The main producer of robusta is Chiapas, followed by Veracruz, Puebla, and Oaxaca.

For MY 2025/2026, production is estimated at 4 million green bean equivalent bags, a 4 percent increase over the previous year. This growth is driven by recovery from heat waves that affected robusta fields in MY 2024/2025. Increased investment in both robusta and arabica management, enhanced pre- and post-harvest practices, and selective harvesting to secure higher quality and market premiums have also contributed.

Domestic consumption trends

Coffee consumption is forecast at 3.2 million green bean equivalent bags for MY 2026/2027, an increase of 1 percent from the previous year. This slight growth is attributed to expansion in retail coffee shops and chains, as well as changing consumption habits favoring premium coffee.

Convenience stores are increasing the availability of ready-to-drink coffee. Caffeine, a coffee company in northern Mexico, has entered a partnership with OXXO, the largest convenience store chain in Mexico. Caffeine produces, roasts, and supplies coffee for nearly all OXXO stores in Mexico and Colombia, ensuring high quality and fast coffee service across the chain network.

Mexico is also Starbucks’ largest market in Latin America and the Caribbean, and its seventh largest globally. With an expansion of approximately 70 new stores annually, the company plans to reach 1,000 stores in the country during 2026.

Major urban areas in Mexico are showing higher demand for high-quality, single-origin coffee. This has created new markets for premium coffee products such as capsules, cold brew, and specialty offerings. Microlots are growing in popularity to meet demand for unique sensory profiles and limited editions.

Online platforms in Mexico are increasing access to specialty coffee brands, single-origin beans, and subscription programs. This online channel enables small roasters to reach customers throughout the country, allowing customers to discover artisanal and responsibly sourced coffee products.

Despite growth in the premium sector, soluble coffee remains more practical and economical, covering approximately 60 percent of domestic consumption. Coffee tricycles, common in Mexico City and other cities, offer café de olla (roasted coffee prepared with cinnamon and sweetened), soluble coffee, and hot chocolate as an affordable and traditional alternative to coffee shops.

Export and import trends

Coffee exports for MY 2026/2027 are forecast at 3.4 million green bean equivalent bags, a decrease of 1 percent from the previous year. Gains in production are expected to satisfy domestic consumption, slightly reducing export volumes.

The United States remains the primary destination market for Mexican coffee in all forms. Exports to the United States reached 2.6 million green bean equivalent bags in 2025. Mexico primarily exports green bean and soluble coffee to the US market.

Coffee imports are forecast at 2.4 million green bean equivalent bags for MY 2026/2027, a decrease of 4 percent. This trend is driven by a forecasted rise in local robusta production, reducing the need for imported green beans. In 2025, the private sector announced various investment programs aimed at increasing coffee production capacity. As a result, Mexico is substituting soluble coffee imports with domestically manufactured products.

Government support programs

Mexico’s Secretariat of Agriculture and Rural Development operates several coffee-specific producer support programs. Production for Wellbeing provides direct financial support of 388 US dollars per producer per year. In 2026, a total of 181,364 producers participated, covering an area of 216,306 hectares.

Fertilizers for Wellbeing delivered 53,542 tons of fertilizer to 151,253 producers in 2026, benefiting an area of 165,984 hectares. This initiative seeks to enhance soil fertility and boost productivity among coffee growers and is expected to expand in scope for 2026.

Café Bienestar, managed by the Secretariat of Wellbeing, aims to distribute affordable coffee through the country network of Bienestar stores. The program buys coffee from producers in Chiapas, Oaxaca, Puebla, Veracruz, and Guerrero and processes it. This program is estimated to represent 3 to 4 percent of the total soluble coffee market.

Frequently Asked Questions

How much coffee will Mexico produce in 2026/2027?
The USDA forecasts Mexico coffee production at 4.1 million green bean equivalent bags for MY 2026/2027, a 1 percent increase from the previous year.

Which states produce the most coffee in Mexico?
Chiapas, Veracruz, and Puebla are the three main coffee-producing states, together accounting for more than 80 percent of national production. Chiapas remains the top producer by volume.

What is the breakdown between arabica and robusta in Mexico?
Mexican coffee production consists of 85 percent arabica and 15 percent robusta. Robusta production is expanding due to its disease resistance and demand from soluble coffee processors.

How is coffee leaf rust affecting Mexican production?
Following years of widespread coffee leaf rust outbreaks, producers have gradually transitioned to replanting arabica rust-resistant varieties. These plants are in early growth stages and are expected to create a more resilient sector.

What is the coffee consumption trend in Mexico?
Domestic consumption is forecast at 3.2 million bags, a 1 percent increase. Soluble coffee covers approximately 60 percent of consumption, while premium and specialty coffee segments are growing rapidly.

Who is the primary buyer of Mexican coffee?
The United States remains the primary destination market for Mexican coffee exports, receiving 2.6 million green bean equivalent bags in 2025.

Author: Qahwa World – Dubai
Source: USDA Foreign Agricultural Service – Mexico City Office
Report Number: MX2026-0026
Date: May 14, 2026

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

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

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

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

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

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

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

2. Production Forecast: MY 2026/27

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

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

Production Data Table

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

3. Climate Challenges: The Threat to Arabica

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

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

Rainfall Data for Coffee Growing Regions

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

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

4. Yield Projections

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

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

5. Price Dynamics: Decline from Record Highs

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

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

6. Export Outlook: Trade Agreements Transform Market Access

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

New Free Trade Agreements

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

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

Export Destinations

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

7. Export Challenges: Premium Prices and Freight Costs

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

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

8. Domestic Consumption: A Growing Market

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

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

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

9. Long-Term Vision: India 2047

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

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

10. Imports: Filling the Gap

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

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

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

11. Key Challenges Facing Indian Coffee Sector

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

12. Opportunities

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

Frequently Asked Questions

How much coffee will India produce in 2026/27?

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

Why is Arabica production expected to decline?

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

What are the new trade agreements benefiting Indian coffee?

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

How have coffee prices changed in India?

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

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

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

Who are the main buyers of Indian coffee?

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

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

 

Coffee Futures Rebound as Dollar Weakness Triggers Short Covering

Posted on by Qahwa World
Dubai – Qahwa World

Coffee prices climbed back from one-and-a-half-week lows on Friday, ending the session in positive territory. The turnaround came as the U.S. dollar dropped to a two-week low, prompting traders to cover short positions in the coffee market. This price recovery was also influenced by coffee futures short covering as traders adjusted their positions. Notably, coffee futures short covering has played a key role in recent market movements.

July arabica coffee rose 0.85 cents (0.30%), while July robusta coffee gained 3 points (0.09%).

Early Losses on Brazil Crop Outlook

Prices initially moved lower on expectations of a larger harvest in Brazil. The Coffee Trading Academy projected Thursday that Brazil’s 2026/27 coffee crop would rise 12% year-over-year to 71.4 million bags.

Just days earlier, arabica had touched a 1.75-month low following forecasts of a record Brazilian harvest. On March 19, Marex Group predicted a record 75.9 million bags for 2026/27, beating Sucafina’s estimate of 75.4 million bags (up 15.5% annually). StoneX also raised its production outlook for Brazil to an all-time high of 75.3 million bags on March 12, up from a prior forecast of 70.7 million bags. Additionally, StoneX expects the global coffee surplus to balloon from 1.8 million bags in 2025 to 10 million bags in 2026 — the widest surplus in six years. As a result, coffee futures short covering activity may increase amid these predictions.

Vietnamese Exports Weigh on Robusta

Soaring shipments from Vietnam, the world’s top robusta producer, are putting pressure on robusta prices. Vietnam’s National Statistics Office reported on April 3 that first-quarter 2026 coffee exports rose 14% year-over-year to 585,000 metric tons. For all of 2025, exports jumped 17.5% to 1.58 million metric tons. Moreover, Vietnam’s 2025/26 production is expected to climb 6% to a four-year high of 1.76 million metric tons (29.4 million bags).

Supply Tightness Offers Support

On the bullish side, arabica supplies are showing signs of tightness. ICE arabica coffee inventories fell to a two-month low of 494,508 bags on Tuesday, contributing to coffee futures short covering by traders seeking to limit risk.

Similarly, robusta supplies are tightening — ICE robusta stocks dropped to a 16-month low of 3,755 lots last Tuesday.

Geopolitical and Export Factors

Ongoing concerns over a prolonged U.S.-Iran conflict and potential closure of the Strait of Hormuz are also supporting prices. Such disruptions have raised shipping rates, insurance premiums, and costs for fertilizers, fuel, importers, and roasters. Therefore, it is evident that coffee futures short covering remains a significant factor in this volatile environment.

Brazilian export data further supports prices. Cecafe reported on April 14 that Brazil’s March green coffee exports fell 10% year-over-year to 2.65 million bags. Brazil’s Trade Ministry also noted on April 7 that March coffee exports dropped 31% from a year ago to 151,000 metric tons.

Bearish Reports and Forecasts

On the downside, the International Coffee Organization (ICO) said on November 7 that global coffee exports for the current marketing year (October–September) edged down 0.3% year-over-year to 138.658 million bags.

The USDA’s Foreign Agriculture Service (FAS) projected in its December 18 biannual report that world coffee production for 2025/26 would rise 2% to a record 178.848 million bags. That includes a 4.7% drop in arabica output (to 95.515 million bags) and a 10.9% increase in robusta production (to 83.333 million bags). The FAS also forecast Brazil’s 2025/26 crop falling 3.1% to 63 million bags, while Vietnam’s output rises 6.2% to a four-year high of 30.8 million bags. Ending stocks for 2025/26 are expected to decline 5.4% to 20.148 million bags, down from 21.307 million bags in 2024/25.

Indonesia coffee output falls for second year as heavy rain disrupts harvest

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Dubai – Qahwa World

Indonesia’s coffee production is set to decline for a second consecutive year in 2025–26 as excessive rainfall disrupts key growing regions, although industry participants say cup quality has remained stable due to reduced pressure on processing. Experts are closely watching the Indonesia coffee harvest 2026 to assess its impact on supply and quality.

Arabica and Robusta volumes are both expected to fall from last year’s levels, with Sumatra among the most affected origins after flooding and landslides restricted access to producing areas and disrupted harvest flows, according to Sucafina Indonesia. In addition, stakeholders are keenly monitoring how the Indonesia coffee harvest 2026 may influence these changes.

In Sumatra, the Arabica harvest has shown an unusual seasonal pattern, with the first phase producing less than the later months, reversing typical output trends. Other origins, including Java, Sulawesi, Bali and Flores, are expected to follow normal harvesting schedules but continue to face weather-related disruptions. Furthermore, the Indonesia coffee harvest 2026 is expected to show diverse patterns across these regions.

Despite lower production, quality has been supported by improved post-harvest attention. For coffee traders, the Indonesia coffee harvest 2026 outcomes will be essential to forecast quality and supply for the next cycle.

“Quality has been very good so far. With less production, processing capacity is less strained and each batch can receive full attention,” said Daniel Shewmaker, Managing Director at Sucafina Indonesia. On another note, coffee experts continue to anticipate fresh details about the harvest for Indonesia in 2026.

Robusta harvesting is underway in Sumatra at lower and mid elevations, with other regions to follow in the coming months. Output is also expected to decline due to persistent rainfall, an unusually large fly crop and an earlier-than-usual start to the season. Heavy rains are also complicating drying conditions across key areas, which could affect the Indonesia harvest for coffee in 2026.

Shewmaker said frequent rainfall was creating challenges for post-harvest processing. Indonesian coffee harvest 2026 analysis will be vital for understanding these processing difficulties.

At the same time, input costs are expected to rise later in the year, particularly fertiliser prices, which are being affected by volatility in global energy markets and geopolitical tensions. Notably, these factors may converge during the Indonesia 2026 coffee harvest season.

Sucafina Indonesia said it has expanded direct sourcing in Aceh, northwest Sumatra, increasing access to traceable coffee lots as part of efforts to strengthen supply chain coverage. This expansion is linked to the company’s response to the anticipated Indonesia coffee harvest trends in 2026.

The company also highlighted ongoing sustainability initiatives in Java and other producing regions, including farmer income programmes, savings groups, composting projects and access to agricultural inputs. Indonesia’s coffee harvest for 2026 will serve as a benchmark for these initiatives.

Early indicators from Sumatra suggest improved flowering conditions earlier this year, which could support a stronger main Arabica harvest beginning in October 2026, the company said. Overall, the Indonesia coffee harvest 2026 is likely to be memorable for its challenges and opportunities.

 

Global Roadmap to Accelerate the Genetic Improvement of Robusta Coffee

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Dubai – Qahwa World

At a time when the global coffee sector stands at a historic crossroads, the journal Frontiers in Plant Science has published one of the most significant research papers of the last decade. It is not merely an academic study but a “rescue document” for the future of coffee. The paper, led by Dr. Robert Kawuki, a Robusta breeding expert at World Coffee Research (WCR), with the participation of 14 researchers representing eight international programs across three continents, outlines for the first time a clear technological path to accelerate the genetic improvement of Robusta coffee (Coffea canephora).

  • Robusta: From “Alternative” to Economic “Pillar”

The face of the global coffee market has changed dramatically. While Robusta represented only 25% of global production in the 1990s, its share has jumped today to exceed 40%. This rise was not accidental; it came in response to the resilience of this species and its ability to withstand higher temperatures compared to the sensitive “Arabica.” However, the study emphasizes that Robusta did not receive its due share of research and genetic development throughout the last century, leaving it operating far below its potential productive and qualitative capacities.

  • Anatomy of Obstacles: Why Have We Been Delayed for Decades?

The study identifies the “wounds” that hindered the crop’s development, as researchers pinpointed three main obstacles:

Fragmentation of Genetic Resources: National breeding programs have operated in isolated islands, with an almost total absence of exchange of genetic material and shared data.

Long Breeding Cycles: The process of developing and distributing a new variety to farmers takes more than 20 years. The research describes this duration as “catastrophic” given the accelerating pace of climate change, which alters the farming environment within a single generation of farmers.

Weak Technical Investment: Robusta has remained reliant on traditional selection methods, while other crops have made massive leaps using genomics and artificial intelligence.

  • The Roadmap: A New “Operating System” for the Industry

The most important conclusion of the paper is the necessity of transforming coffee breeding from “research projects” into a “shared global infrastructure.” The recommendations are summarized in core points:

Demand-Led Breeding: For the first time, there is an emphasis on designing coffee varieties based on “Product Profiles.” This means the researcher must consider the farmer’s needs (high yield and resistance) and the market’s needs (sensory quality) before beginning the hybridization process.

Genetic Acceleration Technologies: The paper calls for the immediate integration of Genomics-assisted selection and digital phenotyping tools. These tools allow for the evaluation of thousands of seedlings in record time and with extreme accuracy, reducing the variety development cycle by more than 50%.

The 3-Year Rule: The study revealed a stunning technical result: evaluating a tree’s productivity in its first three years provides an accurate indicator of over 80% of its long-term performance. This discovery alone will save breeding programs years of unnecessary waiting.

  • The 64% Alliance: A Global Transcontinental Force

What gives this research paper immense executive credibility is the participation of researchers from countries that control 64% of the world’s Robusta exports: Vietnam, Brazil, Indonesia, India, Uganda, Ghana, and Rwanda. These partners now form the backbone of the “Innovea” global network, which seeks to unify genetic breeding efforts to serve as the “infrastructure” serving coffee farmers worldwide.

  • Final Recommendations to Ensure Supply Sustainability

The research paper concludes with an urgent call to decision-makers in the coffee industry: Investing in Robusta improvement is not a luxury; it is “insurance” against potential climatic collapse. The study recommends:

Increasing Sustainable Funding: Moving away from short-term grants toward building investment funds that support long-term breeding programs.

Enhancing Access Pathways: There is no benefit in innovating excellent varieties if they do not reach the farmer quickly and at an affordable price.

Cross-Border Collaboration: Breaking down barriers of secrecy and exchanging genetic resources is the only way to face shared global threats like “leaf rust” and drought.

Conclusion:

The future of global coffee is now linked to the seriousness of implementing this “roadmap.” Robusta is not just a “cheaper alternative” to Arabica; it is the crop that will carry the burden of sustaining the global cup in the coming decades, and scientific research is the only weapon we have to make this cup resilient, profitable, and of high quality.

Indian Coffee in April: 4 Key Shifts Shaping the Global Market

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Dubai – Qahwa World

The Indian coffee market has experienced significant movement in recent weeks. Data through April 21, 2026, reveals record-breaking export figures and a strategic pivot in global demand. Here are the four primary shifts currently defining the sector:

  • 1. Record-Breaking Export Momentum

India’s coffee exports have reached a historic milestone, surpassing $2.1 billion for the 2025–26 fiscal year. Early data from January 1 to April 21 shows total provisional exports of 159,325 metric tonnes, a substantial increase from the 127,024 tonnes recorded during the same period last year. This surge is driven by a combination of higher global realizations and a robust appetite for Indian origins.

  • 2. Robusta Dominance and Value-Add Growth

Robusta continues to anchor the export volume, particularly the “Robusta Cherry” variety, which saw shipments exceed 68,000 tonnes. Notably, there is a clear structural transition toward value-added products. Instant coffee now accounts for approximately 35–40% of total export volume, signaling India’s successful push to be recognized as a manufacturer of processed coffee rather than just a raw commodity supplier.

  • 3. Price Correction vs. Supply Tightness

Arabica prices have undergone a short-term correction, trading near 289 USc/lb—a decline of roughly 5–6% from recent highs. Conversely, Robusta prices remain firm due to tight global supply. This price gap has led many international buyers to lock in Indian Robusta positions early, utilizing it as a high-quality, cost-effective balancing origin for global blends.

  • 4. Strategic Shift Toward Premium GI Origins

India is aggressively promoting its GI-tagged (Geographical Indication) coffees, such as those from Chikkamagaluru and Bababudangiri, to elevate its global brand positioning. This move toward premiumization comes as producers face increasing climate variability. Farmers are increasingly adopting climate-resilient varieties and adaptive practices to protect flowering and yields against irregular rainfall patterns in key regions like Kodagu.

Iran War Drives Coffee Prices Higher as Supply Risks Intensify

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Dubai – Qahwa World

Coffee futures rose sharply on Wednesday, hitting a 3.5-week high as markets reacted to escalating disruptions linked to the Iran war and concerns over global supply chains.

The main driver of the rally was growing uncertainty around the Strait of Hormuz, a critical global shipping route. Traders fear that prolonged conflict could keep the passage restricted, pushing up shipping costs, insurance premiums, fuel expenses, and overall logistics costs for coffee exporters and importers.

At the same time, tightness in robusta supply added upward pressure on prices, with ICE inventories recently falling to their lowest level in more than a year.

However, the broader market picture remains mixed. Arabica coffee had recently slipped to a seven-week low due to expectations of a very large Brazilian crop, with multiple forecasts pointing to a record harvest in the 2026/27 season. Larger projected global surpluses in the coming year are also seen as a long-term limiting factor for prices.

On the supply side, Vietnam continues to support global availability through strong export volumes, reflecting higher production levels in the world’s largest robusta-producing country. Meanwhile, Brazil’s export figures have shown recent declines compared with last year, and uneven rainfall in key growing regions is raising some concern about yield stability.

Longer-term projections from agricultural agencies still point to rising global production, particularly in robusta coffee, while arabica output is expected to decline. Even so, global ending stocks are forecast to tighten slightly in future seasons.

Overall, coffee markets are being pulled between short-term geopolitical disruption linked to the Iran war and longer-term expectations of strong global supply growth.