Colombia is having a banner coffee year – but what’s next?
Sarah Charles
October 17, 2025
colombian coffee
Colombia is reportedly having its best coffee year in over three decades – up 17% from last season
But its 2025–26 harvest is forecast to contract by 5.3% due to heavy rains and the natural coffee cycle
With US tariffs on Brazilian coffee reshaping global supply chains, “tariff arbitrage” and alleged origin blending pose long-term challenges to market trust
COLOMBIA has reportedly closed its most productive coffee year in over three decades, producing some 14.87 million 60-kg bags, a rise of 17% over the prior cycle.
Reuters reports that the performance was buoyed by favourable weather and a vigorous programme of crop renewal. Meanwhile, Colombian authorities reported that between January and August 2025, the value of coffee exports jumped 79.7% year-on-year to reach $3.67 billion, underpinned by elevated global prices.
“As they say, ‘high prices are always a great fertiliser,’” says Albert Scalla, Senior Vice President of Trading at Stonex. “In the next few years, we can expect crop production to rise across several origin countries, as the high prices of recent seasons begin to yield results.”
“Improved farming practices, greater input use, new plantings, and renovated areas are all driving higher yields. Colombia – one of the world’s top three producers – is already seeing these gains, not only due to strong international prices but also thanks to renovation programmes implemented over recent years. Other origins, such as Uganda, are likewise showing steady growth in output.”
For a country that produced approximately 7.6% of the world’s coffee in Marketing Year 2024/2025, the impact is significant. Colombia ranks as the third-largest coffee producer in the world, second-largest Arabica producer, and a leading premium coffee exporter. About 40% of US coffee imports come from Colombia, according to the USDA.
Yet the coffee federation in Colombia is issuing a warning: the 2025–26 cycle is likely to see a contraction. The natural physiological cycle of coffee trees and unusually heavy rains in some regions suggest output may tighten. The USDA reports that Colombian coffee production is forecast to decrease 5.3 percent to 12.5 million bags green bean equivalent (GBE), mainly as a result of heavy rains.
In short, the country’s coffee sector enters a paradoxical moment of surplus now, but with risks ahead.
What a bumper harvest means for global coffee economics
Colombia’s strong output comes at a moment of pressure across global coffee markets.
With yield surges in robust origins like Uganda and Viet Nam – the USDA forecasts a 7% year on year coffee output increase for the latter – and tariff shocks in Brazil and elsewhere disrupting trade patterns, supply and demand dynamics are in flux.
Because Colombia is a major player in washed Arabica, its sudden spike in production does not go unnoticed.
On the sourcing front, one emerging question is whether Colombian exports are being mixed with cheaper Brazilian beans. In August 2025, Brazilian coffee exports to Colombia reportedly surged 578% year-on-year, raising suspicion of “triangulation” – routing Brazilian beans through Colombia to re-export under a Colombian label.
This phenomenon, if widespread, could undercut the premium many consumers assign to “100% Colombian” coffee, undermining trust and distorting trade patterns.
A spokesperson for Dignidad Cafetera in Colombia told Caracol Radio that “the Federation allowed and was complicit in mixing low-quality coffees with ours and allowing it to be exported or to play with the good name of Colombian coffee, which was the best in the world.”
Tariff pressure is central to that distortion: the United States recently imposed a 50% tariff on Brazilian coffee, triggering a realignment of trade routes away from the US and toward Latin markets.
Ongoing market uncertainty and varying origin characteristics are slowing adjustments among US buyers. ING reported last month that recent trade data show Brazil’s coffee exports to the US fell by over 75% in August compared to 2024, as traders hold stocks and farmers wait for higher prices. Meanwhile, exports from Colombia and Vietnam have remained steady, tightening US coffee supplies.
“Having such large tariff discrepancies between exporting countries – some as high as 50% and others as low as 10% – will inevitably create trade imbalances,” says Albert. “I call this ‘tariff arbitrage.’ For example, comparing Brazil’s 50% tariff to a country with a 10% rate, at today’s coffee price of around $4, there’s a potential $1.60 profit margin purely from the tariff difference, even before considering coffee differentials. The profit potential under current market conditions is remarkable.”
“It’s therefore understandable that coffee may flow through third countries seeking to capitalise on this ‘arbitrage.’ This isn’t the first time such a situation has occurred. However, it may prove short-lived. As of today (October 16), the Government of Brazil has begun negotiations with the Trump Administration, and developments could change quickly. Coffee and other tropical commodities could even be exempted from US import tariffs.”
“If tariffs are significantly reduced or eliminated, we can expect coffee market prices to fall. In any case, we should anticipate considerable volatility – not only in origin differentials but also in the broader market.”
With tariff disparities in play, buyers are shifting sourcing away from Brazil toward lower-tariff origins, for now. Colombian coffee could become more attractive to US roasters – both due to tariff differentials and origin prestige – but margins may compress given its overall higher prices, as costs for fertilisers, labour, and transport remain high.
colombian coffee farm
What next: Brazil, tariffs and the balancing act
Looking ahead, Brazil’s forthcoming harvest will likely be pivotal. Brazil remains the world’s largest coffee producer, and its fortunes ripple across the market.
“We can definitely not expect price stability in the near term or in 2026,” says Albert. “Moreover, we should plan for great price volatility on both the outright market as well as coffee differentials.”
“Tariffs are now at the forefront, but weather is also a key factor – particularly how it develops over the next three weeks in Brazil. This will provide an early indication of Brazil’s production outlook, with forecasts expected to reach the market by mid-November. StoneX will release its first look at the 2026 Brazil harvest between November 5 and November 8.”
However, Brazil is not immune to disruptions. The US tariffs have shrunk its access to American markets, pushing exporters to redirect volumes to alternative destinations – including Colombia – as noted above.
If Brazil’s output softens and Colombian bags fill some of the void, Colombia could gain market share – but only if it retains quality and avoids origin dilution.
Tariffs and trade policy will continue to be levers of control. If US import duties deepen or stall, roasters may shift sourcing further, as outlined by ING. Origins with preferential or stable access will gain advantage, or what ALbert refers to as “tariff arbitrage.”. Colombia’s existing Free Trade Agreement with the US gives it relative resilience.
Yet internal challenges loom. Even with a record output, farmer profitability is under strain. According to the USDA, despite easing fertiliser costs, the cost of production in Colombia remains high. This is primarily due to increases in minimum salary rates and a shortage of workers in some producing regions. If Colombia’s next cycle underdelivers, supply tightness could amplify price volatility.
There is also a trust risk. If blending Brazilian beans into Colombian lots is confirmed to be a trend and becomes more widespread – whether overtly or covertly – the premium for origin authenticity could erode. That would hurt specialty buyers and farmers who invested in higher quality.
In that light, Colombia’s surplus is a double-edged sword: it grants short-term export gains and market leverage, but also introduces new vulnerabilities. Ultimately, whether the harvest becomes a boon or a burden will depend on how well Colombia navigates tariff pressures, origin integrity, and next-cycle risks.
Coffee Intelligence