Indian coffee exports grow in value to US$ 1.26 billion

India, the 8th largest coffee grower in the world and the third largest in Asia after Vietnam and Indonesia, has improved its exports to a reported Rs 10,492 crore (approximately US$ 1.26 billion) in FY2023-24 thanks. This is largely attributed to the prevailing high prices of robusta varieties which are the most widely produced variety in the country. Global robusta prices are said to be at a three-decade high because of the drop in production by major producers such as Brazil and Vietnam. Substantial importers of Indian coffee are Germany, Italy, Russia and the United Arab Emirates.

Indian coffee exports in FY 23-24 represent an increase of 12.5% over FY 22-23 in dollar terms and a 16% increase in rupee terms. (Rs 10,492 crore in comparison to Rs 9,033 crore). The 20% higher export prices in FY 23-24, made up for the 2.5% decline in export tonnage from 3.98 lakh tons to 3.88 lakh tons in the previous year. Robusta export prices rose from US$ 2,720 a ton to a three-decade high of US$ 3,255 per ton in FY 23-24.

According to KG Jagadeesha secretary and CEO of the Coffee Board, the increase in export quantities in the past three years has come mainly from the instant coffee segment. Although the coffee growers in the country produce about 3.5 lakh tons of coffee, of which one-third is consumed in the country, a considerable amount of cheaper varieties of robusta are imported for value addition and re-export. For the current coffee crop year which starts in October, the Coffee Board has projected an increase of about 6% to 3.74 lakh tons.

While Indian coffee growers also produce arabica varieties, their farmgate prices have recently been overtaken by the arabicas, which is similar to global coffee price trends. Robusta parchment prices are at Rs 14,000 to 14,500 per 50-kilogram bag, while the more widely produced robusta cherry beans are priced between Rs 8,500 and Rs 8,950 per 50-kilogram bag.

Indian robusta parchment AB is said to be commanding a premium of US$ 700 per ton over the LIFFE (London International Financial Futures and Options Exchange) terminal prices. Indian robusta cherry varieties are getting a premium of US$ 350 to US$ 400 a ton over the London terminal prices. These prices have moderated in the past two months when Indian robusta parchment varieties were getting a premium of US$ 1,100 to 1,200 per ton over the London terminal prices and the robusta cherry variety premiums were between US$ 375 and US$ 400. These premiums are closer to the traditional premium of about US$ 1,000 a ton that Indian robusta attracted in previous years that in the intervening years had fallen to what industry experts called “an absurdly low premium of US$ 100 to 200 a ton.”