Fall in robusta production may see coffee exports declining

India’s coffee exports reached around 399,000 tonnes in 2022

The Indian coffee industry is staring at a downturn in exports this year after a record performance in 2022 that saw shipments rise close to a new peak of 4 lakh tonnes.

With the robusta variety, which makes up the bulk of the country’s coffee production, expected to sink to a decade-low level, triggering a spike in prices, exporters fear losing key markets to cheaper coffee from other origins.

India’s coffee exports reached around 399,000 tonnes in 2022, as per early estimates of the Coffee Board. Robusta coffee, widely grown in India, accounts for over 70 percent of the coffee production, which stood at 342,000 tonnes in 2021-22. The country exports over 70 percent of its coffee.

The post-monsoon estimate of the Coffee Board pegs robusta crop for 2022-23 at 259,000, up from 247,000 tonnes in the previous year. The arabica crop is forecast at 10,1500 tonnes, against 95,000 tonnes in the previous year.

Growers contest Coffee Board’s estimate

While growers argue against the arabica crop estimate of the board, saying it should be nearer to 80,000 tonnes, they more or less agree with the robusta coffee production. But as harvest comes to a close, they feel there is a decline of 20-30 percent in robusta crops.

``The arrivals are quite slow. Usually, the market should be flooded with new crops during this time.  We are just meeting the existing orders and are finding it hard to take new export contracts. The coffee export volumes could decline by 10-15 percent this year, though earnings may remain the same because of better prices,’’ said Ramesh Rajah, president of Coffee Exporters Association.

Domestic robusta prices, too, have shot up, partly due to the rise in international rates.

Robusta cherry prices are at Rs 5,500 per 50 kg, up by around Rs 1,000 from last year. These rates are dearer by 15-20 percent than coffee from other origins. India is the fifth-largest robusta coffee producer after Vietnam, Brazil, Indonesia and Uganda.

Global robusta coffee futures rates have moved by 15 percent from the beginning of the year and are hovering around $2,382 per tonne as the crop in Vietnam and Indonesia are predicted to drop.

‘India could lose its main export market’

“In the current circumstances, we fear India could lose its main market, Italy, which is getting cheaper robusta coffee from Uganda. The West Asian markets, which have been buying more coffee in recent times, have turned to Brazil and Columbia for cheaper arabica coffee. Once we lose these markets, it is difficult to recapture them. We may have to undercut prices which isn’t always feasible because of higher production costs,’’ Rajah said.

Germany, Belgium, Russia, Turkey and Jordan are the other significant export destinations for Indian coffee.

World coffee prices are benchmarked by arabica coffee, which has a 70 percent share of the total coffee consumption, with robusta making up the rest. But exporters say that as arabica prices stayed high last year because of a lean production year in Brazil, its biggest producer, the ratio has shifted in favour of robusta, which now has a 40 percent share in global coffee consumption.

Though arabica prices may drop this year as Brazil enters a boom production period, the consumption pattern may take more time to change. Robusta is the main ingredient of instant coffee, which is consumed widely now.

Fall in robusta output feared

Meanwhile, domestic growers are trying to figure out what went wrong with the robusta crop, which is a sturdier and a disease-resistant variety, compared to arabica. Many arabica growers in Karnataka, the largest coffee-producing state in the country, shifted to robusta in the last few years as stem borer pest attack became rampant in the former.

"On an average, we are expecting a 20-30 percent fall in robusta output. In some areas, it is worse. Dry spell and excess rainfall could be the reason. The absence of summer rains this year could have an adverse impact on the next year’s crop as well,’’ said Marvin Rodrigues, grower and former chairman of Karnataka Planters’ Association.

Kerala, the next biggest coffee-growing state after Karnataka, with predominantly robusta cultivation, too, has suffered a fall in production in the key growing area of Wayanad. Production is down by around 40 percent, according to Prashant Rajesh, secretary of Wayanad Coffee Growers Association.

The Wayanad growers are getting better prices this year with cherry grade showing around 40 percent rise over last year at Rs 125 per kg and the parchment variety selling at Rs 225 per kg, up by nearly 30 percent.

"The Coffee Board owe us an explanation as to why production has fallen. The board should also give us the correct forecast of the crop so that we can plan accordingly,’’ Rajesh said. The Coffee Board estimate of normal annual coffee output in Wayanad is around 58,000 tonnes.