Coffee Exports Show Slight Dip Due to Lower Green Bean Demand
In the first half of the current financial year, the volume of coffee exports from India has experienced a marginal decline, mainly attributed to reduced demand for green coffee beans. However, the total export value has seen an increase. Industry experts suggest that the outlook for the remainder of the year hinges on the size of the upcoming crop, which could be affected by unpredictable weather patterns.
Export Data and Factors Influencing Demand
According to provisional data released by the Coffee Board, coffee exports in terms of volume have decreased by 8%, totaling 192,596 tonnes from April to September in the current financial year. This is a drop from the 209,818 tonnes exported during the same period last year. However, in monetary terms, exports have risen by 2.9%, reaching $605 million compared to $588 million in the previous year.The weakening economic conditions in certain parts of the European Union, the largest buyer of Indian coffee, have impacted the demand for green beans. Some buyers have shifted their preferences to instant coffee due to its value. Additionally, the availability of arabica coffee posed a challenge during the season, as growers and traders in the coffee-growing regions withheld their supply, which is now gradually entering the market.
Industry Perspectives on the Coffee Market
Ramesh Rajah, President of the Coffee Exporters Association, remarked, “The outlook for the second half of the year looks more promising, but it largely depends on the size of the upcoming coffee crop.” He also noted that current order books do not show robust demand, as buyers are waiting to assess the new crop. While demand for arabica coffee appears subdued, there are some orders for robusta beans.
Weather Concerns and Future Projections
Weather remains a significant concern for the coffee crop in 2023-24, with key coffee-producing regions in Karnataka experiencing unusual rainfall patterns during the monsoon season. After a poor blossom season, the dry spell in August has impacted bean development.While it is still too early to provide exact figures, it is expected that the coffee crop for 2023-24 will be lower than the previous year. The Coffee Board’s initial estimates pegged the crop size at 0.374 million tonnes, slightly higher than the final estimates of 0.352 million tonnes for the previous year.
In conclusion, while challenges persist in the coffee export industry due to fluctuating demand and weather uncertainties, industry stakeholders remain cautiously optimistic about the potential for growth in the second half of the year.