Sri Lanka’s coffee comeback story
View(s):Sri Lanka’s unique geography, favourable climate, and increasing investments are fuelling a resurgence in its coffee industry.
With the global speciality coffee market expanding, the country is poised to become a major player. By 2029, Sri Lanka’s coffee market is expected to grow by 10.05 per cent, reaching a market volume of US $106.50 million.
In 2024, revenues are projected to hit $6.64 million, with a 8.79 per cent annual growth rate, culminating in $10.12 million by 2029. Global Cofee market insights report revealed. Globally, the US leads the market, with a projected $2.45 billion in revenue in 2024.
To capitalise on Sri Lanka’s growing potential, the Market Development Facility (MDF), an Australian-funded initiative, has partnered with the private sector to foster industry growth. MDF’s approach focuses on enhancing coffee production, improving sourcing and processing, and promoting industry-wide coordination, addressing key challenges faced by the sector.
Coffee consumption in Sri Lanka is expected to rise modestly, reaching 7,100 metric tons by 2028, up from 7,000 metric tons in 2023.
Though the increase is modest at 0.2 per cent annually, the nation ranked 86th globally in 2023, with the top consumers being the US, Germany, and Japan.
On the production side, Sri Lanka is expected to experience a slight decline, with output falling from 36,000 bags of coffee in 2023 to 35,000 bags by 2028—a 0.3 per cent decrease. Since 1995, Sri Lankan coffee supply has steadily dropped by the same rate, positioning the country 40th globally in coffee production.
Despite these numbers, the number of coffee users in Sri Lanka is expected to reach 630,100 by 2029, with an average revenue per user (ARPU) projected to be $15.82., the Plantation Ministry progress report revealed.
While user penetration remains stable at 2.9 per cent, the country’s coffee industry has a rich history. At its peak, Sri Lanka supplied nearly one-third of Europe’s coffee imports.
Today, 80 per cent of the nation’s coffee production is driven by smallholder farmers, with both men and women contributing to cultivation.
The increasing private sector investments in the specialty coffee segment are unlocking the country’s potential to generate foreign exchange revenue while empowering local communities, Deshan Wickremesinghe, Country Team Coordinator of MDF disclosed.
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