Coffee exports likely to decline 10% this fiscal

India’s coffee shipments by volumes could see a 10th of this fiscal year’s decline amid sluggish demand from recession-hit Germany, the second-biggest buyer, even as grain prices hit record highs. Tracking the global trend, domestic prices for raw coffee have risen by up to 40 percent over the past six months for a variety of Robusta cherry, a widely produced bean in the country.

With Germany slipping into recession recently, Indian exporters are seeing a change in demand. “Germany is an important market for Arabica. Buyers across Europe are asking for less Arabica and more Robusta, which is concerning. Certainly, we are seeing some slowdown in the market,” said Ramesh Rajeh, head of the Coffee Exporters Association. “The only coffee producer What we are seeing is the Robusta cherry, as there are more inquiries about it, while demand for other varieties is weak.”

The rise in instant coffee exports

With demand slowing, we expect overall volumes to be lower than last year. “We are seeing a decrease in volumes of at least 10 percent minimum,” said Raja. India shipped 3.98 thousand tons of coffee, including re-exports, during the 2022-23 fiscal year, worth $1.123 billion (about Rs. 9,013 crores).

In the 2023 calendar year to date (January 1 – June 13), coffee shipments are down slightly at 1.97 thousand tons compared to the same period last year at 2.01 thousand tons. Green bean shipments decreased 13 percent to 88,677 tons compared to the same period last year at 1,01,969 thousand tons. However, shipments of instant coffee including re-export rose 15 percent to 64,043 tons (55,634 tons in the same period last year).

However, in terms of value, exports for this period increased slightly to reach $583 million ($561 million in the same period last year) due to higher prices. The value per unit of shipments this year is above ₹2.43 lakh per ton (₹2.11 lakh per tonne).