Ethiopia Coffee Annual Report Summary – 2025/26 Outlook

Ethiopia is set to reach a new record in coffee production, forecast at 11.56 million 60-kg bags (≈694,000 MT) for the 2025/26 marketing year. This reflects a 9% increase over the previous year, driven by a combination of favourable weather, improved varieties, and intensified productivity campaigns.

---

📊 Production Overview

📈 Key drivers:

• Stumping of old trees and replanting with improved seedlings.
• Expansion of improved nurseries and agronomic support.
• Farmers are switching from khat/eucalyptus to coffee in response to higher prices.
• Policy reforms supporting direct exports by farmers with ≥2 ha.

---

🌍 Regional Contribution

• Oromia: 59% of the national coffee output
• Sidama & South-West Ethiopia: 13% each
• South Ethiopia: 8%
• Central & Others: 7% combined

📌 Growing regions are located between 1,500 and 2,200 meters, with ideal soil and rainfall conditions.

---

☕ Domestic Consumption & Export Forecast

✅ Ethiopia maintains one of the world’s highest domestic consumption rates (~2.3 kg/capita).📦 Exports forecast to grow 11.4% YoY in 2025/26.

---

🌐 Export Structure & Trends

• Green beans = 99.5% of total exports
• Roasted coffee exports tripled in 2023/24 to 27,000 bags
• Top export destinations:
  • Saudi Arabia (18.4%), Germany (17%), Belgium (10%)
  • U.S., South Korea, Japan, China, UAE, Italy, Jordan

📦 2023/24 coffee export value reached $1.7 billion, with total volume at 5.63 million bags, a 44% YoY growth.

---

💰 Price Trends

📈 Prices surged in Q1 2025 due to global supply tightening in Brazil & Vietnam, pushing Arabica futures to 50-year highs.

---

📋 Policy Highlights

• Minimum Export Price Reform: Now updated weekly, indexed to NY "C" prices + FX.
• Direct Export Rights: Farmers with ≥2 ha can bypass ECX and export directly.
• Vertical Integration: Launched in 2021 to streamline the supply chain.
• New Export Capital Requirements:
  • Individuals: 10 million birr
  • Companies: 15 million birr
• Foreign Investment Rule (Directive No. 1001/2024):
  • $10M export history or $12.5M new investment required to enter the Ethiopian coffee export sector.

---

🔮 Outlook & Strategic Implications

• Ethiopia aims to become the world’s second-largest exporter by 2033, targeting:
  • $4B in export value
  • 1.26M MT production
  • Creation of 3M jobs under its Comprehensive Coffee Strategy 2019–2033.

✅ Strong near-term export potential⚠️ Long-term risks: climate variability, stinkbug infestation, quality control, global market dependency

---

📢 Source: For full report: FAS GAIN – ET2025-0014 (searchable via USDA GAIN portal)