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India's coffee exports skyrocketed by 43% to $926.55 million in the first half of 2024, driven by higher global prices and a 13% increase in volume. The European Union's upcoming deforestation regulations spurred demand, especially for robusta varieties. In rupee terms, exports grew by 44%, with unit values rising by 28% year-over-year. Key buyers included Italy, Germany, and the UAE, solidifying India's position as the fifth-largest coffee exporter.

Highlights

Surge in Coffee Exports: India's coffee exports rose 43% in dollar terms to $926.55 million in H1 2024 due to higher global prices and a 13% increase in export volumes compared to the same period last year.

Rupee Value Growth: In rupee terms, exports during January-June 2024 increased 44% to ?7,713.74 crore from ?5,329 crore a year ago, driven by higher per unit values.

Increased Unit Value: Indian exporters achieved a higher per unit value of ?3.16 lakh per tonne, a 28% increase from the previous year's ?2.46 lakh per tonne, reflecting rising global prices.

Volume Growth: Export permits issued in the first half of 2024 rose 13% to 2.44 lakh tonnes, up from 2.16 lakh tonnes a year earlier, with increased demand from the European Union.

EU Demand: European buyers are building inventory ahead of the December 30, 2024, deadline for the European Union Deforestation Regulation (EUDR), which impacts coffee exports among other commodities.

EUDR Impact: The EUDR aims to reduce deforestation-linked imports, requiring stringent due diligence and traceability for commodities like coffee, potentially affecting Indian exports.

Robusta Cherry Growth: The rise in export volumes is mainly due to robusta cherry, which saw a 22% increase to 1.17 lakh tonnes, compared to 96,375 tonnes in the previous year.

Robusta Parchment: Robusta parchment shipments increased slightly to 17,679 tonnes, up from 17,664 tonnes in the previous year, indicating steady demand.

Arabica Dip: Shipments of arabica parchment slightly decreased to 25,680 tonnes from 26,558 tonnes, and arabica cherry exports dropped to 4,529 tonnes from 5,261 tonnes.

Instant Coffee Rise: Instant coffee exports rose by 8% to 23,573 tonnes, up from 21,837 tonnes a year ago, reflecting growing demand for processed coffee products.

Re-exports Increase: Re-exports of coffee also increased by 6.6% to 55,166 tonnes from 48,469 tonnes, showcasing India's role in adding value to imported raw coffee.

Major Buyers: Italy remained the largest buyer of Indian coffee at 51,910 tonnes, followed by Germany at 30,768 tonnes. The UAE and Russia were also significant destinations.

Global Ranking: India, the seventh-largest coffee producer, ranks fifth in coffee exports, with over two-thirds of its approximately 3.5 lakh tonnes annual production exported.

Conclusion

India's coffee export boom in the first half of 2024 reflects a dynamic interplay of rising global prices and strategic European Union inventory buildup ahead of stringent deforestation regulations. The substantial growth in robusta cherry volumes underscores its rising demand. Despite a slight decline in arabica shipments, the overall export landscape remains robust, bolstered by increased instant coffee and re-export activities. As the deadline for the EU Deforestation Regulation approaches, Indian exporters must navigate compliance challenges to sustain this growth trajectory and capitalize on global market opportunities.

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