Costa Rica’s Coffee Industry: Challenges and Opportunities in a Global Market

The Costa Rican coffee industry is facing significant challenges, including declining production and consumption, amidst a backdrop of global market trends that are reshaping the coffee sector. In the marketing year 2025/2026, coffee production in Costa Rica is projected to decline by 10% to 1,170,000 60-kg bags, largely due to the biennial coffee cycle and ongoing systemic challenges such as high indebtedness among producers and unfavorable exchange rates. The strength of the Costa Rican Colón against the U.S. dollar has reduced revenues for growers by nearly 20% since 2022/2023, as most coffee is exported under contracts denominated in U.S. dollars.

Domestic consumption in Costa Rica is also expected to remain unchanged at 305,000 60-kg bags for MY 2025/26, influenced by slow population growth and higher coffee prices. Despite these challenges, Costa Rican coffee has seen a shift in export markets, with Europe surpassing the U.S. as the largest export destination for the first time in 2024, driven by demand for premium and specialty coffee.

Global Market Trends

The global coffee market is experiencing robust growth, projected to reach $102.15 billion by 2025, with a CAGR of 5.5% from 2020 to 2025. The Asia Pacific region is expected to witness the fastest growth, driven by rising disposable incomes and the increasing popularity of coffee culture. However, the industry faces challenges such as climate change and fluctuating market prices, emphasizing the need for sustainable practices.

Opportunities for Costa Rica

Despite the challenges, Costa Rica can capitalize on the growing demand for specialty and premium coffee, particularly in Europe and Asia. By focusing on quality and sustainability, Costa Rican coffee farmers can maintain competitiveness in the global market. The shift towards higher-quality coffee aligns with consumer preferences and can help mitigate the impact of declining production volumes.

Future Outlook

Looking ahead, Costa Rica’s coffee industry must navigate these challenges while leveraging opportunities in the global market. The industry’s resilience and adaptability will be crucial in maintaining its position as a significant coffee producer and exporter. As global coffee consumption patterns continue to evolve, Costa Rica’s ability to adapt to these trends will determine its success in the years to come.