India’s coffee shipments in volumes may see a dip by a tenth this fiscal amidst slackening demand from recession-hit Germany, the second-largest buyer, even as prices of the beans rule at record highs. Tracking the global trend, the domestic prices of raw coffee have risen by as high as 40 per cent over the past six months for the robusta cherry variety, the widely produced bean in the country.

With Germany slipping into recession recently, Indian exporters are witnessing changing demand. “Germany is an important market for Arabicas. Buyers across Europe are asking for less Arabica and more Robusta, which is a matter of concern. Definitely, we are seeing some slackening in the market,” said Ramesh Rajah, President, Coffee Exporters Association. “The only coffee offtake we are seeing is Robusta cherry, for which there are more inquiries, while the demand for other varieties is muted,” he said.

Instant coffee exports up

“With the slackness in demand, we expect overall volumes to be less than last year. We see a dip in volumes of at least 10 per cent minimum,” Rajah said. India shipped out 3.98 lakh tonnes of coffee, including the re-exports, during the 2022–23 fiscal, valued at $1.123 billion (about ₹9,013 crore).

In the calendar year 2023 till date (Jan 1-June 13), coffee shipments are down marginally at 1.97 lakh tonnes over the same period last year at 2.01 lakh tonnes. Green bean shipments are down 13 per cent at 88,677 tonnes over the same period last year at 1,01,969 lakh tonnes. However, the instant coffee shipments including the re-exports are higher by 15 per cent at 64,043 tonnes (55,634 tonne in the same period last year).

However, in value terms, the exports for the period are up marginally at $583 million ($561 million in the same period last year) on account of higher prices. The per-unit value of the shipments this year is higher at over ₹2.43 lakh per tonne (₹2.11 lakh per tonne).

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