India Brews Up Success with Record Coffee Exports in FY23 Fueled by Soaring Prices

The year's exports increased by approximately a tenth in dollar terms over the previous year's total of $1.027 billion, exceeding the Commerce Ministry's aim of $1.088 billion. In reality, Indian coffee exports exceeded a billion dollars for the second year in a row in 2022-23. In rupee terms, export growth is over 18% at 9033.38 crore compared to 7655.50 crore the previous year.

This increase in exports comes despite a 3.6% drop in quantities to 3.98 lakh tonnes from 4.13 lakh tonnes the previous year, according to figures from the Coffee Board of India based on permits issued. The increase in exports is attributed to greater realizations," stated K G Jagadeesha, CEO and Secretary of the Coffee Board. The per unit realized for Indian coffees increased by 22% to 2.26 lakh per tonne in 2022-23, up from 1.84 lakh per tonne the previous year.

"The International Coffee Organization's composite index price was exceptionally high last year compared to the previous ten years," Jagadeesha remarked. The ICO index price for 'Other Milds,' which includes Indian coffees, increased from roughly 185 US cents per pound last year to 226 US cents per pound this year. "Our increase in terms of value is significantly faster than our growth in terms of quantity."

We are behind in terms of quantity when compared to last year because our manufacturing is limited. If prices remain stable in 2023-24, we may surpass the billion-dollar level again," Jagadeesha said. While India may not have issues with the export of value-added instant coffees because we import and re-export after value-addition, green coffee shipments are entirely dependent on natural variables such as weather.

"If the weather cooperates, we will have a strong crop and good exports," he continued. India exports around two-thirds of the country's 3.6 lakh tonnes of green coffee. According to Ramesh Rajah, President of the Coffee Exporters Association, the higher value as a result of the gain in the international market has compensated for the drop in quantity.

"We were expecting a 5% reduction in volumes," Rajah said, adding that it would be difficult to maintain exports until 2023-24. "There could be a slight reduction in quantity terms and a 5% drop in value terms during 2023-24 as order books are only 60% of usual, particularly for the Arabicas, which is a bit concerning," Rajah added.

Higher Indian costs compared to terminal prices in New York and London, as well as in Europe, the major destination for Indian coffees, where consumers struck by a recession are looking for cheaper coffees, have resulted in reduced order-books, according to Rajah.