India’s coffee exports witnessing decline, hit 9-yr low in dollar value terms in FY20: Report


PTI, Jul 22, 2021, 5:59 PM IST

Mumbai: India’s coffee exports have seen a steady decline in the last decade amid growing need for value addition across multiple stages of coffee processing globally and rising demand for specialty coffees, according to a report.

India exported nearly USD 720 million worth of coffee in 2020-21, out of which 42 per cent mainly constituted the Robusta coffee beans exports, according to a report by global trade finance company Drip Capital, which quoted the data from Directorate General of Foreign Trade (DGFT).

According to the report, India”s coffee exports have dropped at an annual decline of 3 per cent between 2011-12 till 2020-21.

In FY12, India”s coffee exports, the eighth-largest producer and exporter of coffee by volume, stood at USD 953 million.

According to the report, the fall can partly be attributed to Covid-19, where in FY2019-20, India”s overall coffee exports reached a nine-year low in dollar value terms and plummeted by 44 per cent in April 2020.

Moreover, the crisis significantly impacted green coffee beans” shipments in March 2020, which is the crucial period for Robusta coffee harvesting and exports, it added.

“Even before the pandemic, the Indian coffee industry had been witnessing stagnation for a while due to a growing need for value addition across multiple stages of coffee processing. However, all is not bleak. Recently, the popularity of specialty coffees like the Monsooned Malabar coffee for one is increasing so much that certain micro coffee estates and roasters are currently trying to tap into this new opportunity on a small, experimental scale,” Drip Capital co-founder and CEO Pushkar Mukewar said.

Besides, Covid-19 also led to a shift in the consumption patterns and an alteration in the product mix in demand, he said.

“Globally, the sales of coffee machines soared as coffee enthusiasts turned towards making the beverage at home rather than venturing outside,” he added.

The report by Drip Capital is based on publicly available data and insights from coffee exporters in the country.

The report further found that statewise, Karnataka dominates the coffee industry, accounting for most exports, followed by Andhra Pradesh that exports more than 50 per cent of instant coffee, which commands a 31 per cent share in the country”s export basket.

According to the report, Italy is India”s largest market, accounting for over 20 per cent of bean coffee exports.

While exports to the Middle East comprise Arabica coffee, Europeans prefer the stronger and bitter flavours of the Indian Robusta blend.

Also, in FY20, Russia, Poland, the USA, Turkey and Malaysia imported over 50 per cent of coffee preparations produced in India, worth close to USD 141 million.

At present, India is the third-largest exporter to Poland in terms of coffee preparations, Indian exporters should continue focusing on building a significant market share in Poland and the USA for instant coffee.

“Indian coffee traders also need to tighten their grip on the Russian market and compete with Brazil and Germany for the same. Our research also showed a low demand for India”s coffee in Italy and Turkey, possibly due to Italy preferring to buy the relatively cheaper African coffee from Uganda and Turkey wanting to diversify its imports. Hence, it is time for India to move away from saturated markets and venture into new geographies,” Mukewar opined.

Overall, although demand for instant and specialty coffee is rising, exports of Robusta coffee have been stagnant, and that of Arabica coffee is on the decline, it said.

With a little bit of value addition and aid from the Coffee Board and the government, India”s coffee traders have the potential to develop their niche in the global coffee market, it added.

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