Coffee exports from India are facing a major challenge in European markets. Countries like Vietnam, Uganda and Brazil offer their produce at low prices, which is of great concern to coffee growers in Wayanad, Karnataka and Tamil Nadu. The major markets for Indian coffee in Europe are Italy, Germany, Belgium and Spain. Apart from Robusta and Arabica, India also exports instant coffee to these markets.
About 70 per cent of the coffee produced in India is exported. Due to better harvests and the depreciation of the currency, more coffee was arriving in foreign markets at lower prices from Brazil for a few months. Vietnam, a major producer, also began to supply coffee at lower prices. Meanwhile, Uganda is now offering low-cost coffee. Robusta from Uganda sells for as little as $ 200 per tonne. Italy is one of the largest markets for coffee from India.
After Brazil, India has the largest market share there. Coffee from India also faces stiff competition in Italy. Demand for this speciality has grown significantly as a result of recent corporate scandals in Italy. During January-June last year, India exported 50,513 tonnes of coffee to Italy. During the January-June period, the country exported only 36,547 tonnes, a decrease of 27.6 per cent. Italy is one of the largest markets for coffee from India. After Brazil, India has the largest market share there. Coffee from India also faces stiff competition in Italy.
Coffee farmers in the region, including Wayanad, are facing a severe crisis as prices in the domestic market have fallen by up to 10% over the previous year. About 75% of Robusta's exports from India to Italy are from Wayanad.
Coffee now faces the same challenge as pepper for a long time in international markets. All the producing countries are making the product cheaper. Vietnam sells about half the price of Indian pepper in the international market. In the international market, Indian pepper is priced at the US $ 4700 per tonne. Vietnam is priced at $ 2,300, Sri Lanka at $ 2,900 and Indonesia at $ 2,400 provides opportunities for events.
Indian coffee exporters may have lost their market share in Europe to Brazil, which has been able to push more quantities taking advantage of a larger crop and lower prices in the last few months.
