Indian Coffee Exports Set to Surge Thanks to Global Price Rally

India’s coffee exports are expected to rise by up to 10% in 2024 due to a rally in global prices, prompting European buyers to pay premiums to increase purchases from the country. India, the world’s eighth-largest coffee grower, mainly produces robusta beans used for instant coffee and some of the more expensive arabica variety. The demand for Indian coffee, particularly robusta beans, is strong due to firm global prices resulting from production issues. India exports three-quarters of its production mainly to Italy, Germany, and Belgium.

Indian coffee typically commands a premium over the global benchmark due to its cultivation under shade, hand-picked, and sun-dried conditions. However, this year, premiums are higher than normal due to a production shortfall. Coffee exports in 2024 could jump to 298,000 metric tons from last year’s 271,420 tons. Indian robusta cherry is fetching a premium of nearly $300 a tonne over London futures due to strong demand.

However, traders are waiting for supplies to increase, which could bring down local prices. The state-run Coffee Board estimates that India’s production could rise to 374,200 tons in the 2023/24 season, but farmers are claiming that rainfall is limiting the upside in production. Additionally, labour scarcity is slowed by higher wages, causing Indian farmers’ income to not rise in the same proportion due to higher production costs.

Read More @ Reuters

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