Production of Robusta coffee has gone by 40%
Robusta crop is mainly used for preparing instant coffee. In the past few years, the production of Robusta coffee has gone down to nearly 40% which directly impact the export of the coffee.
Due to the shortage of Indian beans made it costlier than other overseas produce. The coffee bean produced in Brazil is now cheaper because of the good harvest in the country. Brazil is known as one of the largest producers of coffee.
Chacko Thomas, managing director of Tata Coffee said, “Global prices have fallen and they are feeling a competitive pressure, though they have been able to hold their prices with the help of the certification, new products, and sustainability.” Tata Coffee has plantations in Vietnam and Southern India. Two of the major exporters such as Tata Coffee and CCL products are also feeling the pressure that uses more imported beans for re-export.
“Second half will perform better” said Challa Shrishant, managing director of CCL products
Challa Shrishant, managing director of CCL products said, “Second half will get better, as compared to the first few months of fiscal year which was lean for export.” CCL products are one of the largest coffee exporters from the country. According to sources, the company sources around 15 per cent of the beans from India.
N Sathappan, director of SLN coffee said, “Prices in India are about 20 per cent higher as compared to Global rates, which resulted in increased their cost of production. A major part of their instant coffee export is from beans sourced locally.” Further, he said, “Even if they import it cheaply, export is difficult as there is a heavy disparity in prices. However, buyers are able to source cheaper coffee from other sources such as Vietnam. SLN coffee also imports beans for value addition and exports. They are expecting at least 20 per cent fall in the export, which was about 5,000 tonnes annually.
Coffee export reduced by 10 percent
Overall coffee exports from India have dropped marginally while instant coffee exports have reduced 10 per cent year on year at 111,479 tonnes, this data was collected at the beginning of 2019. A major fall was noticed in the first quarter of 2019-20. In 2018-19, instant coffee export was recorded at 116,563 which is double of what it was a decade ago.