Record Coffee Export Boom May Run Into a Brazilian Glut

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The national coffee boom is colliding with a global market reversal that now threatens to undo the windfall which only recently lifted export earnings to unprecedented levels.

After two years in which tight global supplies and elevated benchmark prices amplified the appeal of Ethiopia’s highland Arabica, the market is turning. A flood of Brazilian beans, stronger supply projections across major producing countries, and a broad retreat in futures prices are combining to squeeze the premium that helped Ethiopia post a record 2.65 billion dollars in coffee export earnings last fiscal year.

On Friday, March 13, 2026, coffee prices fell broadly, with Arabica dropping to a one-week low and the May Robusta contract sliding to a contract low. The selloff was driven by a surging dollar and by expectations of an exceptionally large Brazilian crop. Market analysts raised their estimate for Brazil’s 2027 coffee output to 75.3 million bags, up from 70.7 million bags four months earlier, a revision that underlined how sharply the global supply outlook has shifted.

Rabobank, a Dutch financial services company, projected earlier this month that global coffee output could reach a record 180 million bags in 2026/27. Brazil’s crop agency, Conab, disclosed in February that the country’s 2026 harvest would climb 17.2pc to a record 66.2 million bags. Vietnam, the world’s dominant Robusta producer, reported that its coffee exports in January and February 2026 rose 14pc year-on-year to 366,000tns, extending a surge after full-year 2025 shipments jumped 17.5pc.

For Addis Abeba, the change in mood is not academic as the Ethiopian Coffee & Tea Authority reported in July 2025 that the country earned a record high foreign exchange from coffee exports in the previous fiscal year. Its Director General, Adugna Debela (PhD), disclosed that more than 470,000tns were shipped, far above the Authority’s initial target of 326,000tns. Revenue was nearly 90pc higher than the prior fiscal year’s 1.4 billion dollars, revealing how Ethiopia benefited from a period when global supplies were tight, and buyers chased traceable, single-origin beans.

Export earnings had already reached what then appeared to be an extraordinary 1.7 billion dollars in 2023/24, before almost doubling the following year as global supply shortages pushed prices close to their highest levels in decades.

Those conditions are now unwinding as Ethiopia expands output. For the current marketing year, coffee production is projected to reach 11.6 million 60Kg bags, supported by favourable weather, rejuvenated ageing trees, and the expanded use of improved seedlings. Export volumes are forecast to rise to 7.8 million bags. The Authority’s Deputy Director General, Shafi Umer, previously attributed export growth to structural reforms, including direct export rights for licensed farmers, which enabled more than 100 growers to export their produce independently.

These reforms matter more now, not less, because the growth in volume they made possible may have to offset weakening per-bag prices.

Ethiopia’s gains are arriving as global benchmark prices retreat from the near-50-year highs that made last year’s revenues possible. For Ethiopia, whose beans sit at the premium end of the Arabica market, the main risk is less outright displacement than price compression.

Experts who follow the coffee market foresee that if Brazil, Vietnam and other producers flood the market with additional supply, Ethiopia may still find buyers, but at lower prices. The scarcity premium that lifted earnings is fading. The result is a harsher reality for exporters, suppliers and policymakers alike. The fear is that higher production and stronger logistics may no longer translate into higher revenue unless volumes rise enough to offset the costs.

Federal officials regulating the sector and exporters appear to have recognised the danger early. Following the recent price decline, the Ethiopian Coffee Association and the Authority have issued warnings to the public. Adugna issued what he described as an urgent call to stakeholders over the current decline in global coffee prices. He noted that, despite prior warnings and discussions held by the Ministry of Agriculture, many farmers and exporters hoarded coffee, expecting the high prices seen last year.

The Authority warned that low global prices may persist for up to a year, and holding onto stock unnecessarily exposes exporters to legal liability and deepens financial losses as prices continue to fall. Adugna urged exporters to supply their stock to the central market immediately to prevent further loss of foreign exchange. He also pressed exporters to avoid impulsive trading and instead rely on the Authority’s market analysis.

A national task force has been established to monitor and sanction those attempting to export coffee illegally through contraband channels.

The warning mirrors a widening gap between domestic behaviour and international reality.

Gizat Worku, general manager of the Ethiopian Coffee Association, flagged a price increase in the domestic market even as international prices have been dropping over the past three months. He sees that the current war in Iran has saved coffee prices and noted that the market might otherwise have fallen even further. He argued that the increases in the prices of petroleum, insurance, and risk have kept coffee prices from dropping as expected. Freight costs for exporters have increased by 2,000 dollars per 20ft container.

At the start of the Middle East war, coffee prices rose by 10 to 15 cents, but they declined in the past three days.

"The impact on Ethiopian exports has been lower because shipments are made through FOB terms," Gizat told Fortune. "Other challenges include huge cancellations of contracts signed before the start of the season."

Hassen Ambo (PhD), an expert and coffee supplier for the past two decades, offered a starker assessment of profitability. He would not advise exporters to pay more than 140 Br a kilogram of coffee at the farmers’ market, as it would not be profitable otherwise, noting that speculation has pushed the price to 260 Br. He recommended that the Authority allow suppliers to export directly so they can remain profitable.

"Exporters should release the coffee they are hoarding before it turns into a liability," Hassen warned, calling for a coffee fund to reduce the impact of shocks on the exporting community and the country.

Hassen urged the government to pursue the Lamu Port in Kenya because of the war in the Middle East and to control contraband. For immediate action, he also said certain coffee varieties should be introduced to the domestic market to prevent farmers from suffering losses.

For now, Ethiopia’s export machine is still running at a pace officials celebrate. According to the Authority, the country earned more than 1.3 billion dollars from coffee exports in the first six months of the current budget year, exporting 200,000tns and shipping to 84 countries after adding 20 new markets in the first 11 months of the previous fiscal year. The Authority plans to export 600,000tns and earn three billion dollars by year’s end.

Yet the industry’s own warnings showed that meeting this goal will depend not only on production strength, but on how quickly Ethiopia adjusts to a market no longer governed by scarcity.

PUBLISHED ON [ VOL , NO ]