Global Coffee Prices Surge Due To Supply Unavailability And Bad Weather, Boosting Indian Exports

In The Approaching Two Quarters, Coffee Exports From India Will Rise By 10% Year-On Year Propelled By The Shift In Preference From Expensive Premium-Quality Coffee To Mid-Premium Coffee Amidst Strong Global Prices

Exports for coffee in India that rose in Q4 by 13% year on year in terms of value will likely rise again due to the spike in international prices, forcing consumers to seek cheaper coffee.

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The global market prices increased on the back of frail crop outlook in major producing regions like Brazil due to torrential rainfall.

Indian coffee exports will likely go higher by 10% year-on-year in the following two quarters as consumers are levitating towards mid-premium coffee compared to high-end premium-quality coffee since international prices have significantly increased.

The most significant coffee producer in the world is Brazil, after which follows Vietnam and Colombia, whilst India contributes around 2.5-3.0% to the global market. India imports raw coffee and exports instant coffee.

Exports for coffee in the previous financial year soared to an all-time high for the second consecutive year, more than the fixed target by the commerce ministry of $1.088 billion to $1.126 billion.

Coffee export dropped in volume to 398,000 tonnes, lower by 3.6% in FY23 compared to FY22's 413,000 tonnes.

Exports increased because of a decline in shipping which earlier sky-rocketed by seven times during COVID in 2021 and right after covid in 2022. The cost of shipping for each container dipped to INR 100,000-150,000 to the pre-covid level from the previous INR 700,000-750,000. This is promoting the majority of medium-level coffee exporters, who did not export during COVID because of elevated freight costs.

The Indian coffee market is niche and favoured by nations like Germany, Italy, and Russia.

2023-2024 (April to March) exports will rely on prices and the production of coffee in India. But the deferred blossom showers in huge plantations in Karnataka, Kerala, and Tamil Nadu might stress Indian coffee production, which increases worries about export volumes.

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According to the Procurement Resource article, the prices of coffee are soaring because of a lack of supply and bad weather that hit Brazil recently. Furthermore, the rise in prices for high-end premium coffee, along with the supply shortage from Brazil and other exporting countries, will boost the Indian coffee supply.