Ethiopian coffee exporters face squeeze from global production surge

Global coffee prices are tumbling due to anticipated record harvests from major producers like Brazil, Vietnam, Colombia, and Indonesia. Brazil's Conab agency projects Arabica output could reach 49 million bags in 2026/27, up from 37.7 million last year, thanks to favorable rainfall. Ethiopian exporters warn of tougher times ahead with collapsing margins and rising uncertainty.

Global coffee prices are falling rapidly as major producers prepare for record harvests. Brazil's Conab agency forecasts that Arabica production could reach 49 million bags in the 2026/27 season, a significant increase from the previous year's 37.7 million bags, driven by beneficial rainfall in key growing regions. This anticipated supply increase is already pressuring prices and affecting Ethiopian exporters. Industry leaders in Ethiopia have cautioned that exporters are confronting shrinking profit margins and growing uncertainty. The surge in global output, led by countries such as Brazil, Vietnam, Colombia, and Indonesia, signals challenging periods ahead for those in the Ethiopian coffee trade, which relies heavily on international markets.

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U.S. Treasury Secretary Scott Bessent at a press conference announcing measures to lower prices on coffee and banana imports, with symbolic items in the foreground.
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Bessent says ‘substantial’ moves coming to cut prices of coffee, bananas

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U.S. Treasury Secretary Scott Bessent said Wednesday the Trump administration will announce measures in the coming days aimed at quickly lowering prices on imports such as coffee and bananas, following months of tariff-driven cost pressures.

The Oromia Regional State, accounting for nearly 79 percent of Ethiopia's coffee exports, has introduced a new five percent levy on each kilogram of coffee beans purchased for export. This directive from the state's Trade Bureau will impact over 4,000 coffee producers who sell to exporters, with the fee linked to benchmark prices set by the Ethiopian Coffee and Tea Authority.

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The Ethiopian Commodities Exchange (ECX), founded in 2008, has seen its revenues drop by 22% over the past three years, with its customer base shrinking to just 510 active members. In 2023, it traded only 64% of its planned market volume and collected less than 22% of the nearly two billion Birr it was expected to generate over the last two fiscal years.

China has announced annual quotas and a 55% tariff on beef imports exceeding limits for South American suppliers like Argentina, Brazil, and Uruguay, but Colombia is exempt due to its small market share.

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The prices of major imported agricultural goods in Korea have risen sharply in recent years, outpacing global increases due to the weakening Korean won against the US dollar. Bank of Korea data shows that items like coffee and beef have seen significant hikes in won terms. This trend is exacerbating food costs amid broader economic pressures.

Ethiopia's birr has recorded the third weakest performance among global currencies tracked by Bloomberg in 2025, trailing only the Argentine peso and the Turkish lira.

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South Africa's white and yellow maize futures have dropped to their lowest levels in four years, driven by a stronger rand, global oversupply, and La Niña rains. This decline is expected to ease food inflation and reduce feed costs for livestock farmers, though it poses challenges for grain producers.

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