Weak Re brewing demand for coffee exports in FY24
India registered coffee exports at record high of $1.126 bn as against $1.088-bn target set for in FY23 and it’s 2nd consecutive year of encouraging export performance after the pandemic
- High ruling price of coffee in global mkts
- Rupee fall seen as major reason
- Volume of exports may not increase due to low production
- Prices of Arabica and Robusta varieties may remain robust
- Supply shortfall in Brazil, Vietnam owing to El Nino
Bengaluru: Coffee exports from India are likely to stay on a solid footing in the current financial year though production is not expected to increase on the back of weather conditions. Owing to sound pricing of coffee in the international market along with depreciation of rupee against dollar, export earnings are expected to touch a record high this fiscal year, coffee growers and exporters said.
“Coffee exports are expected to be good this fiscal year as international prices remain favourable. But volume of exports may not change,” Shirish Vijayendra, former chairman, of Karnataka Planters’ Association told Bizz Buzz.
In the last financial year ended March 2023, India has seen coffee exports touching a record high of $1.126 billion as against $1.088 billion target fixed by the Commerce Ministry. This was the second year after the pandemic when the country was able to see record exports of the key commodity.
According to Coffee Board of India data, prices of Arabica variety for July contract on the New York Exchange is hovering around 185.55cents per pound (Rs337.32 per kg), while it is $2,706 per tonne for Robusta variety on the London exchange (Rs 223.14 per kg).
Prices of coffee- both Arabica and Robusta varieties- are likely to remain robust owing to shortfall in supply in major producing countries such as Brazil and Vietnam owing to El Nino weather phenomenon playing out in these nations.
Brazil is the largest coffee producing nation globally, followed by Vietnam, and Colombia. India’s contribution to the global coffee production is around 2.5-3 per cent. India is an importer of raw coffee and exporter of instant coffee.
While export earnings from coffee had grown in the last financial year, it has declined in volume terms. In FY23, export of coffee in volume term declined 3.6 per cent to 398,000 tonne as compared to 413,000 tonne in FY22.
“We have to see how the crop year goes to gauge the production levels of coffee,” said another grower.
Italy is the major country to which Indian coffee is exported. Germany, Belgium, Russia, Turkey and Jordan are the other significant export destinations for Indian coffee. Meanwhile, depreciation of rupee against dollar is likely to keep export earnings steady for Indian exporters. Indian rupee is hovering around 82.38 per US dollar as of now with projections indicating that the domestic currency may further depreciate against the greenback. In 2022, rupee depreciated around 10 per cent against US dollar, giving a major leg up to all export earnings from India.
Coffee exports are expected to be good this fiscal year as international prices remain favourable. But volume of exports may not change
- Shirish Vijayendra, former chairman, Karnataka Planters’ Association tells Bizz Buzz
