A year-on-year increase of 13%! Indian coffee exports surge but still affected by the Red Sea crisis

India is the first country in Asia to grow coffee and ranks sixth in the world in terms of coffee production. Recently, the price of coffee has been rising, and the reason for the price rise is that Vietnam has been hit by a heat wave and drought, affecting the production of Robusta coffee beans and a supply crisis, which has indirectly pushed up the price of Arabica coffee. This is good news for India, which has led to an increase in Indian coffee exports and made Indian coffee more popular in the global market.

Recently, Indian government data show that India exported 125600 tons of coffee in the first quarter of 2024, an increase of 13.35 percent from 110800 tons in the same period last year, mainly due to the increase in global demand for coffee, especially in Robusta. And the main producers of Robusta, Vietnam and Indonesia, have suffered from weather changes.

It is understood that India's Robusta coffee is planted in the direction of boutique coffee, using shade planting, manual picking and sun treatment, so the quality is higher, so the price is higher. But the recent surge in Robusta prices has made Robusta coffee in India less expensive. As a result, Indian coffee exports are expected to jump to 298000 tons from 271000 tons last year.

Although the rise in coffee prices has helped India's coffee exports, it has also led to coffee supply problems. According to local traders, some Indian coffee growers are unwilling to deliver coffee beans at previously ordered prices, leading to export problems in the country. It also said that if these situations continue, it will greatly deal a blow to traders' trust in Indian coffee, resulting in a reduction in new export orders for Indian coffee.

In addition, according to statistics released by the Coffee Council of India, the top five export destinations of Indian coffee are Italy, Germany, Belgium, Russia and Jordan. However, India's imports and exports are very dependent on the Red Sea routes, but the current Red Sea crisis continues, resulting in heavy losses to India's imports and exports.

According to data released by India, goods passing through the Red Sea routes account for 50% of India's exports and 30% of imports, so the Red Sea crisis will cause India's export losses of US $30 billion, and in order to avoid the Red Sea bypass the Cape of good Hope, it will increase the transportation cost of India's international trade by 161%, so India will send military forces that are only for the United States to escort the Red Sea.