India’s coffee exports have seen a steady decline in the last decade amid growing need for value addition across multiple stages of coffee processing globally and rising demand for specialty coffees, according to a report by global trade finance company Drip Capital, quoting data from Directorate General of Foreign Trade (DGFT).
India exported nearly USD 720 million worth of coffee in 2020-21, out of which 42 per cent mainly constituted the Robusta coffee beans exports. According to the report, India’s coffee exports have dropped at an annual decline of 3 per cent during the decade between 2011-12 till 2020-21. In FY12, India’s coffee exports, the eighth-largest producer and exporter of coffee by volume, stood at $953 million.
According to the report, the fall can partly be attributed to Covid-19, where in FY2019-20, India’s overall coffee exports reached a nine-year low in dollar value terms and plummeted by 44 per cent in April 2020.
The report further found that statewise, Karnataka dominates the coffee industry, accounting for most exports, followed by Andhra Pradesh that exports more than 50 per cent of instant coffee, which commands a 31 per cent share in the country’s export basket. According to the report, Italy is India’s largest market, accounting for over 20 per cent of bean coffee exports.
While exports to the Middle East comprise Arabica coffee, Europeans prefer the stronger and bitter flavours of the Indian Robusta blend. Also, in FY20, Russia, Poland, the USA, Turkey and Malaysia imported over 50 per cent of coffee preparations produced in India, worth close to $141 million.
At present, India is the third-largest exporter to Poland in terms of coffee preparations, Indian exporters should continue focusing on building a significant market share in Poland and the USA for instant coffee. Overall, although demand for instant and specialty coffee is rising, exports of Robusta coffee have been stagnant, and that of Arabica coffee is on the decline, it said. With a little bit of value addition and aid from the Coffee Board and the government, India’s coffee traders have the potential to develop their niche in the global coffee market, it added.