Good News for Coffee Exporters; Exports Rises by 14% between Jan and Aug 2021

Coffee exports increased by 14% in the first 8 months of calendar year 2021, owing to higher demand for Indian instant coffee, arabica parchment, and robusta cherry types. The amount of exports increased to 2.56 lakh tonnes from January 1 to August 31, compared to 2.25 lakh tonnes the previous year. Dipping coffee prices last year had many coffee farmers worried mostly from southern India.

Shipments increased by 19% in monetary value over the time, reaching $607 million from $511 million. In currency terms, exports were Rs 4,467 crore, up 17% from Rs 3,801 crore in the same period the previous year.

The amount of Indian instant coffees increased by 78 % to 16,029 tonnes over the period, while the premium variety Robusta parchment suffered a setback. Coffee imports for re-export as value-added products increased by 12% to 62,895 tonnes.

“The growth number is a little deceptive since it is based on a low foundation due to last year's poor performance. Even by nominal standards, it is a healthy increase,” said Ramesh Rajah, President of the Coffee Exporters Association. “Demand has improved, but premiums have remained low and freight prices have risen, resulting in reduced realisations for farmers,” Rajah added.

Market in Europe

According to Rajah, freight prices to Europe, India's primary market, have increased by more than 300 %. Covid's expansion and European lockdowns had a negative impact on Indian coffee imports last year.

Exporters aimed for a 10% increase in calendar 2021 over the previous year's 3.06 lakh tonnes. “We will match last year's numbers, but a 10% increase is doubtful since there may be a slowdown next quarter because there isn't much coffee left and costly freight may dissuade exports. Next year's first quarter should be promising, according to Rajah.

Robusta parchment is in poor shape, with exports down 12% to 20,002 tonnes. Arabica parchment shipments increased by 22% to 32,205 tonnes, while Arabica cherry shipments decreased by 4% to 8,796 tonnes. During this time, the volume of Robusta cherries increased by 13.5 percent to 1.16 lakh tonnes.

Despite the drop in premiums, exporters' per-unit realisation increased by about 3.5 %to 1,74,257 per tonne, up from 1,68,390 per tonne in the same time previous year.