Rising global prices, pent-up demand post-Covid, lift shipments toa new high
India’s coffee exports hit a new high during 2021-22, clocking over a billion dollars for the first time. This latest export milestone is notwithstanding the challenges such as higher freight rates and the ongoing Russia-Ukraine crisis impacting the shipments towards the end of the financial year.
Coffee shipments during 2021-22 registered a whopping 42 per cent growth at $1.042 billion over the previous year’s $734.98 million, aided by an increase in volumes and higher realisations. In rupee terms, the shipments are estimated at Rs. 7,766.77 crore — a 42 per cent growth over the last year’s Rs. 5,451.90 crore. In volume terms, the coffee shipments also scaled a new high of 4.19 lakh tonnes, a 35 per cent growth over the previous year’s 3.10 lakh tonnes.
“We are happy that we have achieved the ambitious export target fixed by the government,” said KG Jagadeesha, CEO and Secretary, Coffee Board. The Commerce Ministry had set an export target of $1.07 billion for fiscal 2022.
Jagadeesha said factors such as prevailing high prices due to short supplies in Brazil and Colombia; the increase in Indian production due to higher yields over the last two years; steps taken by the Coffee Board to clear logistical bottlenecks and promote coffee by organising virtual buyer-seller meets with over a dozen countries have contributed to the growth in shipments during 2021-22
The average per unit realisations for the Indian exporters were higher by about 5.4 per cent at Rs. 1,84,965 per tonne during 2021-22 as against Rs. 1,75,476 in the previous year.
Instant coffee segment
Ramesh Rajah, president, Coffee Exporters Association, attributed the growth in the shipments to the surge in international prices and post-Covid demand despite several challenges.
Exports could have been better, but the hurdles due to the high freight rates, container shortage, supply chain issues, and the Russia-Ukraine crisis impacted the instant coffee segment.
Russia is the largest buyer of Indian instant coffees, accounting for about 15 per cent of the shipments. Rajah said the instant coffee shipments have been impacted due to the Russia-Ukraine conflict and exporters have been facing problems in realising their payments. The impact of the Russian crisis would be felt in the April-June quarter.
Coffee Board’s Jagadeesha admitted that exporters have been facing payment-related issues due to the Russia-Ukraine war and the government has been trying to resolve it.
India exports over two-thirds of the over 3 lakh tonnes of coffee produced. For the current coffee year 2021-22 ending September, the Coffee Board, in its post-monsoon estimates, had pegged the crop size at 3.48 lakh tonnes, including 2.49 lakh tonnes of Robusta and 99,000 tonnes of Arabicas.