India’s coffee industry has achieved a groundbreaking milestone, with exports soaring past the $1 billion mark for the first time in history. Between April and November of FY24, coffee exports reached a record $1.15 billion, a 29% increase compared to $803.8 million during the same period last year. This remarkable growth underscores India’s growing prominence in the global coffee market, traditionally overshadowed by its tea exports.
The sharp increase in India’s coffee exports is attributed to a dramatic surge in Robusta coffee prices. Robusta beans, which account for over 40% of global coffee production, saw prices spike by 63% this year, driven by supply constraints in major coffee-producing nations like Brazil and Vietnam. In June, Robusta prices reached $4,667 per metric ton on the London-based ICE Futures Europe market.
India’s premium-quality coffee has successfully captured a significant segment of the global market. While Indian tea struggles to gain similar traction, coffee exports have thrived, driven by the demand for high-grade beans and favorable market dynamics.
Production setbacks in Brazil and Vietnam have further amplified India’s coffee export success. Brazil, the world’s largest coffee producer, has faced reduced yields due to drought and high temperatures, causing its coffee exports to drop significantly. Vietnam, the second-largest producer, also reported lower forecasts, though output is expected to recover partially. In contrast, Indian coffee producers in Karnataka, Kerala, and Tamil Nadu have maintained stable production levels, despite global challenges. Karnataka alone, home to major coffee-producing districts like Chikkamagaluru and Kodagu, contributed over 248,000 metric tons of coffee in 2022-23.
India’s coffee exports have benefited from strategic stockpiling by European buyers preparing for the European Union’s Deforestation Regulation (EUDR), set to take effect in December. This regulation aims to prevent the import of products linked to deforestation, creating market uncertainties for agricultural exports, including coffee. While the EUDR presents compliance challenges for Indian exporters, it has also spurred demand as European buyers secure supplies ahead of potential disruptions. India, with its higher deforestation rates, faces heightened scrutiny, but exporters are adapting to navigate these new regulatory landscapes.
India’s coffee export growth reflects its resilience and ability to capitalize on global market opportunities. With rising prices, strategic positioning, and increasing demand in Europe, India is solidifying its reputation as a key player in the global coffee industry. This historic achievement marks not only a financial milestone but also highlights India’s potential to become a powerhouse in coffee exports, standing tall among the world’s leading producers.