India's Coffee Exports to Rise 10% YoY on Shift to Mid-Premium Coffee & Firm Global Price

Due to a shift to mid-premium coffee from expensive premium-quality coffee amidst firm international prices, for the next two quarters, India’s coffee exports are expected to go up by 10% year-on-year in value terms.

In the Q4 quarter in value terms, India’s coffee exports which had risen 13% in the year are expected to go up further due to higher international prices, driving consumers to less expensive coffee.

Ramesh Rajah, President of the Coffee Exporters Association said, “The higher value because of the profit in the global market has made up for the decrease in volume." Prices in the international market rise due to the lower crop outlook in prominent yielding nations like Brazil in view of torrential rainfall.

For the next two quarters, India’s coffee exports are expected to go up by 10% year-on-year in value terms due to a shift to mid-premium coffee from expensive premium-quality coffee amid firm international prices, Rajah said.

Rajah predicted Arabica coffee prices to be approximately 200 cents per pound on the New York exchange, and $2,300 per tonne for the Robusta variety on the London exchange because of likely shortfall in supply in main producing countries such as Vietnam and Brazil as El Nino weather phenomenon are expected to disturb monsoon rainfall.

Globally, Brazil is the largest coffee producer followed by Vietnam, and Colombia, while India’s contribution to the global market is approximately 2.5-3.0%. India is an importer of raw coffee and an exporter of instant coffee.

Coffee exports for the last financial year ended March hit a record high for the second consecutive year at $1.126 billion against the $1.088 billion target fixed by the commerce ministry.

Ajoy Thipaiah, Chairman of the Coffee Committee of the United Planters Association of South India said, “Exports are expected to be on par with the last financial year in value terms," However, the volume of exports may remain low.

Data from the Coffee Board of India indicated that the exports of coffee diminished by 3.6% in volume to 398,000 tonnes in FY23 against 413,000 tonnes in FY22.

The market for Indian coffee is niche and preferred by countries such as Germany, Italy, and Russia.

Exports in 2023-24 (April-March) will depend on prices and coffee production in India. Globally, the prices are good. However, the delayed blossom showers in major plantations in Kerala, Tamil Nadu, and Karnataka may weigh on India’s coffee production this season significantly which raises concerns over export volumes.