Coffee business on the boil

Business State

Export of coffee and domestic consumption has increased.

India’s coffee exports have increased from 2.25 lakh tonnes in 2020 to 2.45 lakh tonnes up to September this year. The domestic consumption also showed a slight increase of approximately 1.6 percent in 2021, said Coffee Board of India.

K.R. Shetty, Director at Indian Coffee Trade Association said, “Most of India’s coffee production goes to Europe. The monetary value of this year’s exports stands at around Rs.5,000 crore.”

Statistics from the Coffee Board revealed that the total production of coffee in Karnataka this year has been around 2.6 million tonnes, whereas in 2020 it was at 2.35 million tonnes.

Coffee Board Public Relations Officer, Dr. Babu Reddy said, “Mainly the state produces two crops, Arabica and Robusta, out of which the production of Arabica crop has been low in the last year. The untimely rainfall in the state has affected the production. But when it comes to the international export, Robusta coffee beans are preferred over Arabica and this year we also have an increase of around eight percent in crop yields.”

Data from the Coffee Board states that 33 percent of the crop is lost due to excess rainfall in the state. Karnataka dominates the coffee trade production as it accounts for 70 percent of India’s total coffee production.

Prabhakar, manager at Vijaya Coffee Roastery whose coffee comes from Chikamagaluru said that Arabica beans are preferred for domestic consumption.  “Robusta coffee beans are strong as compared to Arabica. And in India, consumers do not prefer very strong coffee,” he said.

Producers face another problem in higher freight rates due to a shortage of containers, worldwide. The government has increased freight rates by 60 percent.

“The harvesting of Robusta beans will start in the next few weeks and around 70 percent of the production gets exported to places like Europe, UK and the Middle East. But the increased freight rates are a major problem for us,” said Prabhakar.

Shivani Bhatia, trade analyst said, “the coffee trade in India seems to be doing well after witnessing losses due to the pandemic. But exports have declined to a Compound Annual Growth Rate (CAGR) of minus three between 2012 and 2021. There is a possibility that next year’s exports will be impacted due to the rainfall which affected production. The consumption patterns of consumers have also changed because of the pandemic and tea continues to dominate the Indian consumption market.”

Bhanvi Sharma
Visual Storyteller | Filmmaker Documenting Life through my Photographs & Films. Trainee Multimedia Journalist at Indian Institute of Journalism & New Media