Tag: USDA report

Costa Rican Coffee Output Rises 3.5% in 2026

Posted on by Qahwa World

Author: Qahwa World – San Jose

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

Executive Summary

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

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

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

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

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

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

El Niño Threatens the Next Season

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

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

Declining Area and Number of Farmers

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

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

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

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

Exports, Imports, and Consumption

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

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

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

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

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

EUDR Compliance: Deforestation Free Coffee

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

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

Frequently Asked Questions

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

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

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

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

How has the exchange rate affected farmer revenues?

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

What are the main export destinations for Costa Rican coffee?

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

How many coffee farmers are there in Costa Rica?

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

Is Costa Rica ready for the EU Deforestation Regulation?

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

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

Colombian Coffee Output Rises 7.2% in 2026

Posted on by Qahwa World

Author: Qahwa World – Bogota

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

Colombia Coffee Output Rises 7.2% in 2026

Executive Summary

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

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

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

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

Production Drop in 2025/2026 Due to Heavy Rains

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

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

Lower Prices Encourage Farm Renovation

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

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

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

Exports, Imports and Stocks

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

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

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

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

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

Domestic Consumption and Government Policies

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

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

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

EU Deforestation Regulation Compliance

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

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

Frequently Asked Questions

How much coffee will Colombia produce in 2026/2027?

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

Why did production drop in 2025/2026?

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

How does El Niño affect Colombian coffee production?

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

What are the main export destinations for Colombian coffee?

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

What percentage of Colombian coffee complies with the EUDR?

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

How do lower coffee prices affect farmer decisions?

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

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

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.

Similar stories:

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

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

Honduran coffee production surges to 5.53 million bags

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.