India's Coffee Export Surpasses USD 1 Billion For The First Time. Here's Why

India has added to its list of significant achievements as the coffee export sector surpassed 1 billion US dollars. The country’s coffee exports have exceeded 1 billion dollars for the first time. According to the Centre for Monitoring Indian Economy (CMIE), coffee exports reached $1,146.9 million between April and November in FY24, marking a 29% increase compared to the previous year. Reports state India’s coffee exports increased over 12 per cent to 1.28 billion dollars for the full year in 2023–24.

What Led to the New Record?

The sudden surge in Robusta coffee prices and strategic stocking by European buyers have influenced the growth in export value. The need to stock up in anticipation of the new deforestation law imposed by the European Union also contributed to the surge. This regulation could potentially increase the cost of coffee and other agricultural exports to the EU.

Price of Robusta Coffee Increases

Robusta coffee’s price, which accounts for over 40% of global production, has notably surged up to 63%, primarily due to supply constraints from major producers like Vietnam and Brazil.

Global Production Obstacles

The world’s largest producer, Brazil, experienced a record-breaking drought that significantly impacted its coffee crop. Vietnam, the leading producer of the cheaper robusta bean, also faced weather-related challenges and reported lower yields.

Lack of rainfall and geopolitical and logistical challenges might have further added to the impact on coffee prices. Additionally, disruptions to shipping in the Red Sea and potential US tariffs have complicated the global coffee supply chain.