India's Coffee Exports Surge by 12.22% in FY24, Driven by Robust Demand for Robusta

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India's Coffee Exports Surge by 12.22% in FY24, Driven by Robust Demand for Robusta

Team Finance Saathi

27/May/2024

Key Points:

India's coffee exports grew by 12.22% in FY24, reaching a value of US$ 1.28 billion.
The demand for Robusta coffee significantly contributed to this export growth.
Major export destinations include Italy, Russia, the UAE, Germany, and Turkey.

India's coffee exports have witnessed a remarkable surge in the fiscal year 2023-24, showcasing a significant growth of 12.22% compared to the previous year. The total value of coffee exports reached an impressive US$ 1.28 billion, up from US$ 1.14 billion in 2022-23, according to data from the Commerce Ministry. This growth has been largely fueled by the rising global demand for Robusta coffee, a variety known for its strong, bitter flavor and higher caffeine content compared to its counterpart, Arabica.

India’s Position in the Global Coffee Market

India stands as the third-largest producer and exporter of coffee in Asia, cultivating both Arabica and Robusta varieties. While Arabica beans are prized for their lower caffeine content and smoother, sweeter taste, Robusta beans have gained popularity due to their robustness and higher yield. The increasing preference for Robusta in international markets has significantly boosted India's coffee export figures.

Export Volumes and Major Markets

In terms of volume, coffee shipments from India have also seen a notable rise. During the January-March period of 2023-24, the country exported 125,631 tonnes of coffee, marking a 13.35% increase from the 110,830 tonnes exported in the same period the previous year. This substantial growth underscores India's strengthened position in the global coffee trade.

Italy remains the top destination for Indian coffee, reflecting the strong demand for Robusta in the European market. Other significant markets include Russia, the UAE, Germany, and Turkey. These countries have consistently shown a preference for Indian coffee, contributing to the overall export growth.

Factors Driving Export Growth

Several factors have contributed to the surge in India's coffee exports:

Increased Demand for Robusta: The robust flavor and higher caffeine content of Robusta beans have made them a popular choice in many countries, particularly in Europe and Asia. This preference has been a major driver behind the growth in exports.
Quality and Certification: Indian coffee is known for its quality and the adherence to international standards. Certifications and sustainable farming practices have enhanced the reputation of Indian coffee in global markets.
Strategic Market Expansion: Efforts by Indian exporters to tap into new markets and strengthen existing trade relationships have played a crucial role. Marketing campaigns and participation in international trade fairs have helped in promoting Indian coffee globally.
Government Support: The Indian government has provided various incentives and support measures to boost agricultural exports, including coffee. Initiatives such as the Agricultural and Processed Food Products Export Development Authority (APEDA) have been instrumental in facilitating this growth.

Challenges and Future Prospects

Despite the positive growth, the Indian coffee industry faces several challenges. Climate change poses a significant threat to coffee cultivation, affecting yield and quality. Additionally, fluctuations in global coffee prices can impact the profitability of exports.

To sustain and enhance growth, the industry must focus on:

Diversification: Expanding the variety of coffee products, including specialty and organic coffees, can attract a broader market.
Innovation: Investing in technology and research to improve coffee cultivation and processing techniques.
Sustainability: Promoting sustainable farming practices to ensure long-term viability and meet the growing demand for ethically produced coffee.

Conclusion

India's coffee export performance in FY24 highlights the country's growing prominence in the global coffee market. The 12.22% increase in export value to US$ 1.28 billion is a testament to the robust demand for Indian coffee, particularly Robusta. As the industry navigates through challenges and leverages new opportunities, India's coffee exports are poised for continued growth, reinforcing its position as a key player in the global coffee trade.

By maintaining high quality, expanding market reach, and adopting sustainable practices, India can ensure that its coffee industry not only thrives but also contributes significantly to the global coffee landscape. The ongoing efforts to enhance production and export strategies will play a crucial role in achieving this goal.

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India's Coffee Exports Surge by 12.22% in FY24, Driven by Robust Demand for Robusta

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