New Delhi : India’s coffee exports, which grew 13% year-on-year in the Q4 quarter in value terms, are expected to drive consumers towards less expensive coffee due to higher international prices.
“Higher prices have offset the fall in volumes due to gains in the global market,” said Ramesh Raja, president of the Coffee Exporters Association. In view of the torrential rain.
Rajah said that for the next two quarters, India’s coffee exports are expected to grow by 10% in value terms on an annual basis, as there is a shift from costlier premium quality coffee to mid-premium coffee.
The May contract of Arabica coffee is trading at 195.90 cents a pound () on the New York Exchange on Friday. 354.84 per kg), and the same contract of Robusta coffee is quoted at $2,442 per tonne ( 200.63 per kg).
Rajah estimates that Arabica coffee prices will be around 200 cents a pound on the New York Exchange and $2,300 a ton for the Robusta variety on the London Exchange, because of supply constraints due to the El Niño weather phenomenon in major producing countries such as Brazil and Vietnam. Shortage is likely. Monsoon rains are expected to disturb.
Brazil is the largest coffee producer globally, followed by Vietnam, Colombia, while India accounts for about 2.5-3.0% of the global market. India is an importer of raw coffee and exporter of instant coffee.
Coffee exports for the last fiscal year ending March reached a record high of $1.126 billion for the second year in a row against the target of $1.088 billion set by the commerce ministry.
“Export in value terms is expected to be at par with the last financial year,” said Ajoy Thipaiah, chairman of the coffee committee of the United Planters Association of South India. “Export volumes, however, may remain low.”
Coffee Board of India data shows that coffee exports declined by 3.6% to 398,000 tonnes in FY23 as against 413,000 tonnes in FY2012.
According to Thipaiah, the drop in shipping cost also boosted exports, which increased sevenfold in 2021 during covid and in 2022 immediately post covid. Shipping cost per container has dropped to pre-Covid levels from 100,000-150,000 700,000-750,000. This is seen encouraging most of the medium scale coffee exporters who were not able to export during covid due to high freight cost.
Indian coffee has a niche market and is preferred by countries such as Italy, Germany and Russia.
The boom in exports is also attributed to higher realisations. Per unit realization was 22% higher for Indian coffee 226,000 per tonne in the previous financial year as against 184,000 per tonne in 2021-22 (April-March), said KG Jagadish, secretary and CEO of the India Coffee Board.
Exports in 2023-24 (April-March) will depend on prices and coffee production in India. Globally the prices are good. Jagadeesh said, however, that delayed flowering rains in major plantations in Kerala, Tamil Nadu and Karnataka could significantly impact India’s coffee production this season, raising concerns over export volumes.
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