Ethiopia is poised to consolidate its position among the world’s largest coffee origins, with green coffee production forecast at 12.1 million 60-kilogram bags in marketing year 2026/27 and a raft of modernization and traceability measures underway, according to a new report from the USDA Foreign Agricultural Service summarized by Daily Coffee News on 12 June 2026.
Daily Coffee News, citing the USDA’s Coffee Annual report for Ethiopia, said the 12.1‑million‑bag figure represents a 4.7% increase over the previous season, while harvested area is forecast to rise 1.3% to 800,000 hectares. The same report projects exports to increase 2.4% to 7.13 million bags in 2026/27, of which about 7.1 million bags are expected to be green coffee and 30,000 bags roasted.
The USDA’s global Coffee: World Markets and Trade circular places these numbers in a wider context, forecasting record world coffee production of 178.8 million bags in 2025/26 and Ethiopian output at 11.6 million bags in that year. Separately, Ecofin Agency reported that Ethiopia’s 2026/27 harvest is projected at 726,000 tonnes, equivalent to 12.1 million bags, and noted that harvested coffee area has expanded by 40,000 hectares over three seasons to reach 800,000 hectares.
Over the longer term, Ethiopia’s coffee sector has grown rapidly. Food Business MEA, also citing USDA data, reported that national coffee production has nearly tripled in two decades, rising from about 4.5 million bags in 2005/06 to the USDA’s current forecast of 12.1 million bags. Ecofin Agency stated that Oromia accounts for 59.5% of Ethiopia’s coffee harvests, with the Southwest region contributing 13.7%, Sidama 12.9% and the Southern region 7.1% over the past three years.
Despite this growth, the production base remains dominated by smallholders. Daily Coffee News reported, citing the USDA, that around 90% of Ethiopia’s coffee comes from smallholder farmers and that more than 5.9 million farmers are engaged in coffee production. According to Food Business MEA, coffee now generates nearly one-third of Ethiopia’s total export revenue.
The Ethiopian government has paired this expansion with reforms and a long-term development agenda. The USDA’s 2025 GAIN report on Ethiopia’s coffee sector describes a Comprehensive Coffee Development Strategy running from 2019 to 2033, which sets targets of more than $4 billion in coffee export earnings, production of 1.26 million metric tons and three million jobs, and an ambition for Ethiopia to become the world’s second-largest coffee exporter by 2033. The same report notes that more than 450,000 hectares of coffee land have been rejuvenated and replanted with improved varieties, and that national average yields are expected to rise from 0.75 to about 0.90 metric tons per hectare.
Modernization policies are also reshaping market structures. The USDA GAIN report describes a direct export reform introduced in 2021, allowing smallholder farmers with at least two hectares of coffee to obtain export licenses under a vertical integration model. Separately, ENA English quoted Ethiopian Coffee and Tea Authority Director-General Adugna Debela as saying that, under this broader strategy, “effective work has been carried out by identifying structural problems in the sector, increasing production and productivity, and expanding market destinations.”
Traceability has become a central focus as Ethiopia prepares for the European Union Deforestation Regulation (EUDR), whose implementation has been delayed to 30 December 2026, according to Alrano.com. Alrano reported that Ethiopian partners are already working on compliance, with Dimtu mapping 692 farms, Boledu completing traceability work for five of its nine washing stations and the Yirgacheffe cooperative describing its mapping as almost halfway complete.
Government officials have framed these efforts as part of a broader push to align supply, quality and market access. In comments carried by ENA English, Ethiopian Coffee and Tea Authority Deputy Director-General Shafi Omar said, “The government is playing a decisive role in supporting economic growth by ensuring that coffee is produced in sufficient quantity and quality to meet international market demand.”
Looking at near-term trade, Daily Coffee News reported that Ethiopia’s coffee exports in 2024/25 reached 7.43 million bags, valued at $2.89 billion, representing a 31.9% year-on-year increase in volume and a 69.4% increase in value. Ecofin Agency stated that the sector generated $2.65 billion in exports in fiscal year 2024/25, while ENA English reported that Ethiopia’s export earnings from all goods reached $1.6 billion in the first five months of the 2025/26 fiscal year, up from $907 million in 2020/21.
China has become a particularly important destination. Daily Coffee News reported that Ethiopian exports to China surged 264.1% to 670,000 bags in 2024/25, supported by tariff-free access, and that China has risen from 17th place a decade ago to become the country’s third-largest coffee buyer. Food Business MEA put the value of Ethiopia’s coffee exports to China at $274 million in 2024/25.
At the same time, the USDA report cited by Daily Coffee News forecasts that domestic coffee consumption in Ethiopia will rise 11.1% to 5 million bags in 2026/27, and notes that strong domestic consumption competes with exports and helps keep local prices high.
On the ground, market participants describe a demanding season. Alrano.com reported that fresh cherry prices in Ethiopia have tripled, peaking at $1.51 per kilogram compared with $0.45 in the previous season, creating what it called a “high-stakes market” where exporters’ mood ranges from cautious to “gambling.” Exporter Erkabose W. Giorgis told Alrano.com, “Our break-even is $5.10/lb. We have never sold this high before.”
Ecofin Agency, drawing on USDA forecasts, stated that Ethiopia could overtake Indonesia as the world’s fourth-largest coffee producer in 2026/27, with Indonesia’s production forecast to drop 8% to 11.38 million bags while Ethiopia’s harvest is projected at 12.1 million bags.
