Global price rise to fuel coffee exports | Mint – Mint

NEW DELHI : India’s coffee exports, which had risen 13% on year in the Q4 quarter in value terms, are expected to go up further because of higher international prices, driving consumers to less expensive coffee.
“The higher value because of the gain in the global market has made up for the drop in volume,” Ramesh Rajah, president of Coffee Exporters Association, said. Prices in the international market rose because of lower crop outlook in major producing nations like Brazil in view of torrential rainfall.
For the next two quarters, India’s coffee exports are expected to go up by 10% year-on year in value terms due to a shift to mid-premium coffee from expensive premium-quality coffee amid firm international prices, Rajah said.
On Friday, the May contract of Arabica coffee on the New York exchange is being traded at 195.90 cents per pound ( 354.84 a kg), and the same contract of Robusta coffee is quoted at $2,442 per tonne ( 200.63 per kg).
Rajah forecasts Arabica coffee prices to be around 200 cents per pound on the New York exchange, and $2,300 per tonne for Robusta variety on the London exchange because of likely shortfall in supply in major producing countries such as Brazil and Vietnam as El Nino weather phenomenon are expected to disturb monsoon rainfall.
Brazil is the largest coffee producer globally, followed by Vietnam, Colombia, while India’s contribution to the global market is about 2.5-3.0%. India is an importer of raw coffee and exporter of instant coffee.
Coffee exports for the last financial year ended March hit a record high for the second consecutive year at $1.126 billion against the $1.088 billion target fixed by the commerce ministry.
“Exports are expected to be on par with the last financial year in value terms,” said Ajoy Thipaiah, chairman, Coffee Committee of United Planters Association of South India. “Volume of exports, however, may remain low.”
The export of coffee declined 3.6% in volume to 398,000 tonne in FY23 against 413,000 tonne in FY22, data from the Coffee Board of India showed.
According to Thipaiah, exports also rose due to a fall in shipping cost that had shot up seven-fold during covid in 2021 and immediately after covid in 2022. Shipping cost per container has plunged to the pre-covid level at 100,000-150,000 from 700,000-750,000. This is seen encouraging most medium-level coffee exporters, who were not able to export during covid due to higher freight costs.
The market for Indian coffee is niche and preferred by countries such as Italy, Germany and Russia.
The spike in exports has also been attributed to higher realisation. The per unit realisation for Indian coffee was 22% higher at 226,000 per tonne in the last financial year against 184,000 a tonne in 2021-22 (April-March), said KG Jagadeesha, secretary and CEO of India Coffee Board.
Exports in 2023-24 (April-March) will depend on prices and coffee production in India. Prices are good globally. However, the delayed blossom showers in major plantations in Kerala, Tamil Nadu and Karnataka may weigh on India’s coffee production this season significantly, which raises concerns over export volumes, Jagadeesha said.
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