CoffeeNetwork (New York) - Indonesia is set to become the largest source of production losses in the global coffee market during the 2026/27 season, according to the latest USDA Coffee: World Markets and Trade report. While Brazil, Vietnam, Ethiopia and several Central American producers are poised for larger crops, Indonesia is moving in the opposite direction, with output forecast to fall by 1.0 million bags to 11.38 million 60-kilogram bags. That decline represents the largest year-over-year drop among major coffee-producing countries and underscores the growing vulnerability of coffee production to increasingly erratic weather patterns.
The USDA attributes the decline primarily to adverse weather in Indonesia's robusta-growing regions. Excessive rainfall disrupted flowering and cherry formation across lowland areas of Southern Sumatra and Java, regions that account for approximately 75% of Indonesia's robusta production. As a result, robusta output is forecast to fall from 11.0 million bags in 2025/26 to 10.0 million bags in 2026/27. Arabica production, by contrast, is expected to remain largely unchanged at around 1.4 million bags.
For the global coffee market, Indonesia's decline is particularly noteworthy because it comes at a time when robusta supplies are becoming increasingly important. While much attention has focused on Brazil's record arabica harvest, robusta remains a critical component of instant coffee production, espresso blends, and value-oriented coffee products. Indonesia ranks among the world's largest robusta producers and exporters, making any production setback relevant to international supply balances.
Coffee trees require a delicate balance of moisture throughout their development cycle. Adequate rainfall is necessary to stimulate flowering and support cherry development, but excessive precipitation can be just as damaging as drought.
In Indonesia's case, the problem was not a lack of water but an overabundance. USDA analysts noted that persistent rainfall interfered with flowering and cherry formation in key producing regions. Coffee flowers are highly sensitive during the pollination stage, and prolonged wet conditions can reduce successful fruit set. Heavy rainfall may also increase flower drop, inhibit pollination activity, and contribute to disease pressure, ultimately reducing the number of cherries that develop into harvestable coffee beans.
The impact has been most severe in Southern Sumatra and Java, the core of Indonesia's robusta sector. These lowland growing regions are responsible for approximately three-quarters of national robusta production and serve as the backbone of the country's export industry. When weather disruptions occur across these areas simultaneously, the effects are reflected quickly in national output figures.
Indonesia's decline is particularly striking because it follows a period of recovery. After producing 8.15 million bags in 2023/24, Indonesia rebounded strongly to 10.7 million bags in 2024/25 and then climbed further to 12.37 million bags in 2025/26. The upcoming decline will erase much of that recent growth, bringing production back to levels closer to historical averages.
The volatility reflects the weather-sensitive nature of Indonesian coffee production. Unlike Brazil, where mechanization and large-scale farms can help mitigate some production risks, Indonesia's coffee sector remains highly fragmented, dominated by smallholder farmers operating across geographically diverse islands. Weather disruptions therefore tend to have an outsized impact on crop outcomes and can be difficult to offset through technology or agronomic interventions.
The production decline is expected to translate directly into lower exports.
USDA forecasts Indonesian coffee bean exports to fall by more than 800,000 bags, from 7.84 million bags in 2025/26 to 7.0 million bags in 2026/27. Total coffee exports, including processed products, are expected to decline from 8.84 million bags to 8.05 million bags.
That reduction matters because Indonesia plays an important role in supplying robusta coffee to international buyers, particularly across Asia, Europe and the instant coffee industry. Lower Indonesian availability could increase competition for supplies from Vietnam, Uganda and Brazil, especially if demand for robusta continues to grow.
However, the broader market impact may be partially offset by record production elsewhere. Vietnam is forecast to harvest a record 32.5 million bags in 2026/27, while Brazil's robusta crop remains historically large at 24.4 million bags despite a modest decline from last year's record harvest. Uganda is also projected to achieve another record crop at 7.16 million bags. These gains help explain why global coffee production is still forecast to reach a record 189.7 million bags despite Indonesia's setback.
Indonesia's experience reflects a broader challenge facing the coffee industry worldwide. Coffee production has become increasingly vulnerable to weather extremes, including both drought and excessive rainfall.
In recent years, Brazil has suffered through droughts, heat waves and frost events, while Vietnam has grappled with periods of dryness and irrigation concerns. Indonesia now provides another example of how excessive moisture can be equally damaging. The industry has moved beyond simply monitoring rainfall totals and increasingly focuses on rainfall distribution and timing. Even above-average precipitation can reduce yields if it arrives during critical flowering and fruit-setting periods.
The situation also raises questions about the potential influence of evolving ocean-atmosphere patterns. Market participants have been paying close attention to emerging El Niño conditions and their possible impacts on coffee-producing regions. While El Niño is often associated with drought concerns in parts of Southeast Asia, local weather outcomes can vary substantially depending on timing, intensity and regional climatic interactions.
Despite the decline, Indonesia remains a major coffee producer with projected output of 11.38 million bags, leaving the country among the world's leading suppliers. The key question for traders and roasters is whether the 2026/27 downturn proves temporary or marks the beginning of a more prolonged period of weather-related production instability.
Coffee markets will be watching weather conditions closely over the coming months, particularly across Sumatra and Java. Recovery in flowering and cherry development during the next production cycle could quickly restore output potential. Conversely, additional weather disruptions would reinforce concerns about Southeast Asia's increasingly volatile production outlook.
For now, Indonesia stands out as the largest source of production losses in the USDA's latest global balance sheet. While Brazil's record crop is dominating headlines, Indonesia's weather-driven decline serves as a reminder that global coffee supply remains highly dependent on favorable growing conditions, and that a single season of poorly timed rainfall can erase millions of bags of production.
Alexis Rubinstein
Source: USDA
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