Ethiopia’s Coffee Went From Almost Lost to Global Superstar, Here’s How

By Aksah Italo
Published on 01/26/26

Ashebir Haile has been a coffee farmer for as long as he can remember. It is a skill he has honed over decades.

The 47-year-old man, a sole breadwinner for a family of four, has experimented with various crops before ultimately settling on coffee in South-West Regional State.

Despite sustained labour and experience, returns have fallen short of expectations.

“Profits don’t come as expected,” Ashebir said.

For much of the past five years, Ethiopia’s coffee exports have mirrored the broader rhythms and vulnerabilities of Ethiopia's economy. Germany, Japan, Belgium and the United States have been the country’s principal buyers, together accounting for roughly 60 percent of export volumes.

According to the International Coffee Organization, export shipments rose gradually from about 4.1 million bags in 2019/20 to roughly 4.8 million bags by 2021/22, reflecting steady production growth and resilient global demand. Coffee remained Ethiopia’s dominant export throughout this period, though gains were incremental.

That trajectory broke abruptly in 2022/23, when exports fell to around 3.9 million bags, a contraction of nearly 20 percent year-on-year. The downturn was not primarily climatic. Instead, it exposed deep-seated structural bottlenecks; contract disputes, foreign-exchange shortages and logistical disruptions that delayed shipments and discouraged formal exports.

The decline marked Ethiopia’s weakest coffee export performance in almost a decade, revealing how administrative frictions can quickly overwhelm agricultural potential.

Fresh shocks followed. In early 2024, escalating geopolitical tensions in the Red Sea delivered a major setback. Repeated attacks by Yemen’s Houthi militia linked to protests against Israel’s military operations in Gaza left nearly 3,000 tonnes of Ethiopian coffee stranded at Djibouti’s ports, threatening export earnings and the livelihoods of millions.

Adugna Debela (PhD), head of the Ethiopian Coffee & Tea Authority (ECTA), had warned of the “dire implications” for the sector, describing the situation as deeply worrying.

At the same time, a convergence of international and domestic pressures weighed on the sector, weakening global demand, heightened regulatory scrutiny over vertical integration practices and the looming compliance burden imposed by the European Union’s Deforestation Regulation (EUDR) all disrupted supply chains.

Under the EUDR, companies importing agricultural commodities into the EU are subject to stringent due-diligence obligations, including geolocation requirements to verify that products are not linked to deforestation after December 31st 2020. Ethiopia exports nearly 30 percent of its coffee to Europe, a market that accounts for almost half of global coffee consumption. Losing access to these buyers through non-compliance would carry severe economic consequences.

Yet the recovery that followed was unusually sharp. In 2023/24, Ethiopia exported an estimated 5.6 million bags, a rebound of more than 40 percent and the highest volume on record. Momentum carried into 2024/25, with exports projected at around seven million bags, positioning Ethiopia as one of the main drivers of Africa’s coffee export surge. 

The revival reflected improved harvest conditions, but more importantly, policy adjustments that eased market access, reduced export bottlenecks and strengthened coordination along the supply chain.

The economic effects were immediate. Export revenues rose faster than volumes, buoyed by elevated global arabica prices. Coffee earnings exceeded 2.6 billion dollars in 2024/25, providing a critical source of foreign exchange at a time of acute currency shortages.

Experts argue that Africa’s most populous country also benefited from its shift toward a more liberalised foreign exchange market. The move triggered a sharp depreciation of the birr, which lost more than 150 percent of its purchasing power over roughly fifteen months. Analysts say the weaker currency boosted exporter revenues, particularly in coffee and gold, by improving price competitiveness and lifting local-currency earnings.

For millions of smallholder farmers, higher prices translated into improved incomes; for the macroeconomy, coffee helped stabilise export receipts and partially relieve balance-of-payments pressures.

The authority head, Adugna said the authority has developed a 15-year strategy aimed at reviving both quality and productivity in a sector that remains insufficiently competitive globally. A new directive standardising the grading and quality of value-added coffee is intended to improve service delivery and sharpen competition, strengthening Ethiopia’s credibility in international markets.

Yet the rebound also showed unresolved weaknesses. Ethiopia still exports the overwhelming majority of its coffee as unprocessed green beans, capturing only a small fraction of the global value chain. Export performance remains highly sensitive to price cycles, climate variability and tightening regulatory requirements particularly in Europe, where traceability and deforestation rules are becoming more exacting. Heavy reliance on a single commodity amplifies these external risks.

The past five years therefore tell a dual story. Ethiopia’s coffee sector has demonstrated a remarkable capacity to rebound when constraints are eased and market conditions align. But it has also revealed how fragile export-led growth remains when it rests primarily on raw commodities. Record shipments in 2023/24 and 2024/25 offer breathing space, not resolution. Whether coffee continues to underpin Ethiopia’s external position will depend less on the next harvest than on reforms that deepen value addition and reduce exposure to volatile global markets.

Experience from other coffee-driven economies suggests that Ethiopia’s challenge is not production, but conversion turning agricultural strength into durable economic value.

Brazil’s dominance rests less on quality than on scale, logistics and integration. Studies show that efficient transport corridors, deep financial markets and tight coordination between growers, traders and exporters allow coffee earnings to feed directly into growth. Colombia offers a different lesson including value-chain upgrading. Through decades of public-private coordination, the country moved beyond raw exports into processing.

An industry expert with years of experience argued that adequate financing for farmers and suppliers is essential to unlocking large-scale production of high-quality coffee. While Brazil can compete on volume, he noted, it cannot match Ethiopia’s quality, owing to the country’s favourable agro-ecological conditions.

He urged a decisive shift toward value addition, which currently accounts for less than 0.04 percent of total exports.

“There needs to be a transition from commodity-based to value-added exports,” he said.