Sri Lanka shows promise as an emerging coffee origin

  • Sri Lanka’s coffee-growing area is expected to increase by 1,000ha by 2025
  • 80% of Sri Lanka’s total coffee production comes from smallholder farmers
  • As such, any inward investment must put these farmers at the centre of the sector’s development

SRI LANKA continues to be associated with tea production, largely driven by decades of government investment and policy directed towards infrastructure and development in the sector.

Nevertheless, in the past two decades, Sri Lankan coffee has experienced a significant revival. The country’s history as a coffee producer, its favourable geographical conditions, and the high-altitude central highlands have set the stage for a resurgence in farming arabica.

Although current coffee production and export volumes remain low, there is potential for significant growth. At the start of the decade, there were 4,690 hectares devoted to coffee production, but this is expected to expand to 5,763 hectares by 2025.

Market Development Facility (MDF) has been working closely with Sri Lanka’s coffee industry since 2017, facilitating growth opportunities and supporting its development.

Funded by the Australian Department of Foreign Affairs and Trade, MDF is a multi-country initiative that promotes sustainable economic development throughout the Pacific region, including in Sri Lanka. MDF estimates that coffee production in Sri Lanka has the potential to multiply within the next 5 years.

As Sri Lankan specialty coffee production flourishes, a local coffee culture is beginning to take root. To promote the collective interest of stakeholders working to develop the sector, the Lanka Coffee Association (LCA) was established in 2021. In collaboration with LCA, the industry recently held its first national coffee festival in 2022 and followed up with a second in 2023.

Sri Lanka could become a serious coffee origin

Sri Lanka focuses on quality

Sri Lanka’s mountainous geography and warm climate creates the ideal landscape for growing arabica. This is one of the reasons the nation’s return to coffee production is focusing on quality and targeting the specialty coffee market.

Kushan Indika Samararatne is the general manager at the Colombo Coffee Company. He characterises the flavour profile of Sri Lankan coffee as “fruity and spicy”, achieved through both wet and dry processing methods.

With the advantageous conditions for arabica cultivation in Sri Lanka, there is a belief among some that the strategy for promoting its coffee should prioritise single-origin products. Most arabica production occurs at the elevation of 1,000 metres above sea level or higher, using traditional farming practices with minimal chemical fertilisers – perfect conditions for developing a niche, single-origin product.

“Sri Lanka is a low-volume grower of high-quality specialty arabica coffee, with unique taste profiles,” says Rinosh Nasar, founder and CEO of Soul Coffee Company. “It is vital to protect its uniqueness and value proposition by exporting it as a single origin rather than in blends.”

Nevertheless, Sri Lanka’s century-long focus on tea has caused it to overlook some vital advancements in the coffee industry. Therefore, certain aspects related to coffee quality and processing require structural and systemic improvement.

According to Kushan, efforts to improve quality should take a “multi-faceted approach that includes the introduction of best practices in the industry, raising awareness about the financial benefits of complying with good practices, improving knowledge sharing, and investing in infrastructure and equipment”.  

To achieve this, it is crucial to educate farmers about the financial benefits of producing quality coffee. “By complying with good practices, farmers can produce higher-quality coffee that can fetch premium prices, leading to increased profitability,” Kushan says.

It is equally important to focus on developing processing infrastructure. Investments should prioritise equipping processing centres with appropriate machinery for pulping, fermenting, drying, and sorting while remaining adaptive to the local climatic conditions.

Sri Lanka could become a major coffee origin

Smallholders are the key

According to MDF, there are opportunities for investment in Sri Lankan coffee in four key areas. 

  • Expanding coffee farms: Given the ideal climate conditions, there is a unique opportunity to convert abandoned tea estates into coffee farms.
  • Expanding smallholder networks: This is crucial for the sector’s growth.
  • Developing coffee processing: If farmers sell red cherries rather than green beans, processors will benefit from uniformity, leading to greater quality control.
  • Introducing and improving barista training programmes: Sri Lankan baristas need training and upskilling to take Sri Lankan specialty coffee to the global stage through participation in international barista competitions.

To support the industry further, MDF has developed a guide for potential investors, focusing on the need to improve the quality and uniformity of coffee production. However, this could be difficult to manage, as around 80% of coffee sourced in Sri Lanka comes from smallholders who are spread across the country, making any centralised initiative a challenge to execute.

Therefore, any industry-wide initiatives must be developed to include these farmers – not simply to leave no farmer behind, but for the betterment of the Sri Lankan coffee sector.

By learning from the mistakes of the global coffee industry over the last 20 years, Sri Lanka has an opportunity to develop programmes and infrastructure while placing smallholders at the centre of the sector’s development.

Ultimately, Sri Lanka could have real potential as a coffee origin, with private investment supporting a focus on increasing quality. At the same time, less existing infrastructure and tradition surrounding coffee production could help Sri Lanka start fresh – without being bound by historic issues that hinder so many other coffee-producing countries today.

Coffee Intelligence

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