In the first half of 2022, India's coffee exports increased by 19% year on year.

Raw Common Coffee Bean

India

Emerging Market Opportunities

Market & Price Trends

Published Jul 21, 2022

India is the third largest coffee producer and exporter in Asia, primarily producing the Robusta variety. Since 2020, Indian coffee exports have struggled in the global market due to pandemic-induced supply chain issues, logistic shortages, and low demand in the global economy. The country started to recover only during the second half of 2021, and since then, they have been increasing and registering record-high growth. During the first half of 2022, the country recorded a YOY increase of 19% in the volume of coffee exports. The country managed to match the competitive coffee prices offered by Vietnam and Indonesia, which export quality coffee to European countries. The higher shipment costs from these two countries to Europe gave India a competitive advantage and resulted in higher exports.

India is the third largest producer of coffee in Asia, with a share of roughly 5% of the global coffee production. The country primarily produces the Robusta coffee variety, which has a share of 72% of India’s total coffee production, and the remaining 28% is the Arabica variety. About 70% of the total production is exported to over 50 countries across the world, with the major markets being Italy, Germany, Belgium, and the Russian Federation. Other markets also include Libya, Poland, Jordan, Malaysia, the US, Slovenia, and Australia. In calendar year (CY) 2021-22, the total coffee exports from India were worth about USD 1.04 billion, a YoY increase of 42%. Currently, the world is waking up to the flavours of Indian coffee! Coffee has become very popular among the importing countries, which has increased the volume of Indian coffee exports drastically.

According to the Coffee Board of India, in the first half of CY 2022–23 (January to June), the country exported 224 thousand mt of coffee, which is a YoY increase of 19%. India shipped both Robusta and Arabica varieties, besides instant coffee. According to the Board’s latest data, the shipment of Robusta coffee jumped by 39.43% to 132 thousand mt during this period, while Arabica coffee exports declined 16.75% to 29 thousand mt. In the case of instant coffee, India’s shipments increased by 24% to 15 thousand mt. Even though the volume of coffee re-exported remained slightly higher at 46 thousand mt, which is a YoY increase of about 3%. This is the second year of recovery for Indian coffee exports, as in CY 2020–2021, the country exported very limited volumes due to the COVID pandemic lockdown. There was a slight recovery in CY 2021-22, but the volume of exports could not reach the usual levels as the impact of logistical constraints, supply chain management, and low demand in the market continued to affect coffee exports in the first half of 2021 as well. Since then, India’s total coffee exports have been driven by a global supply crunch and the resultant price, despite the Russia-Ukraine conflict slowing down the exports of instant coffee.

India struggles to match the prices offered by other robusta-producing Asian countries like Vietnam and Indonesia. All three Asian countries offer similar quality coffee, but the latter two are able to offer exports at lower prices to European countries where the demand is high. However, with India’s freight rate to Europe being lower in comparison to Vietnam and Indonesia, the country somehow manages to match the coffee prices of Vietnam and Indonesia in the global market and get more buyers. The outlook for Indian coffee exports remains strong as the country is anticipating a good crop this year and some of the supply chain issues continue to alter the coffee trade dynamics. In addition, if the high freight rates continue, India will definitely have a comparative advantage in exporting to European countries over Vietnam and Indonesia.