Ethiopia is on course to become the world’s fourth largest coffee producer, overtaking Indonesia after a sharp fall in output linked to extreme weather conditions.
Fresh forecasts from the U.S. Department of Agriculture show Indonesia’s coffee harvest could drop to 11.38 million bags in the 2026 to 2027 season, an 8 per cent decline from the previous year. The fall would see the Southeast Asian nation slip behind Ethiopia in the global coffee rankings.
At the same time, Ethiopia’s coffee production is expected to rise to 12.1 million bags, equivalent to 726,000 tonnes, driven by favourable rainfall and expanding investment across the sector.
The contrasting fortunes of the two coffee giants have largely been shaped by weather patterns. Indonesian producers struggled with excessive rainfall in key Robusta growing regions during mid 2025, disrupting flowering and damaging yields.
Ethiopia, however, enjoyed more stable weather conditions that boosted plantations and strengthened harvest prospects.
If the projections hold, it would mark the third time in five years that Ethiopia has overtaken Indonesia, following similar shifts during the 2023 to 2024 and 2024 to 2025 coffee seasons.
The latest figures also underline Ethiopia’s steady rise as a global coffee powerhouse. Production is set to record a fourth straight year of growth, climbing by 34 per cent since the 2023 to 2024 season.
The USDA said Ethiopia’s expansion has been fuelled by new coffee growing areas, improved seedlings, rising private investment and modern processing facilities.
Coffee farmland has also expanded significantly, with harvested areas increasing by 40,000 hectares over the past three seasons to reach 800,000 hectares.
“Industry analysts project that Ethiopia will continue its production growth, particularly as investments in improved cultivars, processing modernization and large scale plantation development mature,” the USDA said.
Despite the strong outlook, challenges remain. Ethiopia’s coffee industry still faces climate shocks, volatile global prices, rising production costs and informal trade that can affect farmers and supply chains.
Coffee remains the backbone of Ethiopia’s agricultural exports and a major source of foreign income. The sector generated $2.65 billion in export earnings by the end of the 2024 to 2025 fiscal year, with authorities now targeting $3 billion in the next fiscal cycle.
Around 5.9 million Ethiopian farmers currently depend on coffee production, according to the Ethiopian Coffee and Tea Authority.
The Oromia region remains the country’s biggest coffee producing hub, accounting for nearly 60 per cent of national output, ahead of Southwest Ethiopia, Sidama and Southern Ethiopia regions.
