India’s coffee exports for financial year ending March, 2023 scaled a new high at $1.126 billion on increase in global prices. The exports for the year are higher by about a tenth in dollar value terms over the previous year’s $1.027 billion and surpassed the target of $1.088 billion fixed by the Commerce Ministry.
In fact, the Indian coffee exports have clocked over a billion dollars for the second consecutive year during 2022-23. The export growth in rupee value terms is higher at around 18 per cent at ₹9033.38 crore as compared to previous year’s ₹7655.50 crore.
This growth in exports is despite a 3.6 per cent decline in volumes at 3.98 lakh tonnes over the previous year’s 4.13 lakh tonnes, as per the Coffee Board of India’s data based on the permits issued.
“The increase in exports is due to higher realisations,” said Coffee Board CEO and Secretary K G Jagadeesha. The per unit realisation for Indian coffees was higher by 22 per cent at ₹2.26 lakh per tonne during 2022-23 as compared to ₹1.84 lakh per tonne during the previous year.
“The International Coffee Organisation’s composite index price last year was very high compared to the last 10 years,” Jagadeesha said. The ICO indicator price for ‘Other Milds’ a category under which the Indian coffees are classified, went up from around 185 US cents per pound last year to 226 US cents per pound.
Growth in value
“Our growth in value terms is much faster than in quantity. In terms of quantity, we are lagging behind when compared to last year as our production is limited. If the prices remain same during 2023-24, then we may exceed the billion dollar mark again,” Jagadeesha said. While India may not face problems in exports of value added instant coffees, as we import and re-export after value-addition, the green coffee shipments are all dependent on natural factors such as weather. “If there is a favourable weather, we will have a good crop and good exports,” he added.
India exports about two thirds of the 3.6 lakh tonnes of green coffees produced in the country.
Decline in volumes
Ramesh Rajah, President, Coffee Exporters Association, said the higher value due to the gain in the international market has made up for the decline in volumes. “We were expecting a 5 per cent decline in volumes,” Rajah said adding that it would be hard to sustain the exports during 2023-24. “There could be a marginal decline in quantity terms and five per cent dip in value terms during 2023-24 as the order books are only 60 per cent of the normal, particularly for the Arabicas, which is a bit of concern,” Rajah said.
Factors such as higher Indian prices, compared to the terminal prices in New York and London, and in Europe, the largest destination for Indian coffees, where consumers hit by a recession are looking are cheaper coffees, have resulted in lower order-books, Rajah added.