India’s Coffee Exports to Drop 15% This Year

India, Asia’s third-largest coffee producer, is set to export significantly less coffee this year. The drop comes amid weakening demand from Europe—its biggest market—and shrinking domestic stockpiles. For coffee professionals and importers tracking global supply chains, this decline signals tighter availability and potential price shifts in the coming months.

Yes, India’s coffee exports are expected to fall by 15% in 2023 compared to the previous year, with total shipments dropping below the 2011 record of 346,900 metric tons, according to the Indian Coffee Exporters Association.

Why Indian Coffee Exports Are Falling

Ramesh Rajah, chairman of the Indian Coffee Exporters Association, told Bloomberg that export volumes would be lower than the all-time high reached in 2011. The primary reasons: reduced demand from Europe—particularly crisis-hit Italy and Greece—and a drawdown in local inventories. He also noted that buyers are unwilling to carry forward inventory, preferring instead to wait and see how markets develop.

European Demand and Economic Pressures

Europe accounts for 70% of India’s coffee exports, making it the most critical market. However, economic conditions there remain challenging. Analysts surveyed by Bloomberg predict eurozone growth will slow sharply in 2023, from 1.6% in 2022 to just 0.2%. This economic slowdown directly impacts coffee buying, especially in key markets like Italy and Greece, which are struggling financially.

Global Coffee Market Dynamics

Beyond Europe, broader market trends are also influencing India’s export outlook. Rajah pointed out that buyers are avoiding inventory buildup, leading to more cautious ordering. He also forecasted that arabica coffee prices would remain stable for now, while robusta prices could fall by around 10% by March due to increased global production. According to Macquarie Group data, this season’s global robusta output will exceed demand by 2.5 million bags (60kg/bag). Meanwhile, Vietnam, the world’s largest exporter of coffee for instant drinks, is expected to increase production by 9% to 21.25 million bags this season.

Current Coffee Futures Prices

As of December 30, futures prices reflected these shifting dynamics. Arabica coffee for March delivery rose 1.2% to $2.2685 per pound on ICE New York, while robusta coffee for March delivery gained 1.2% to $1,810 per ton on the London International Financial Futures and Options Exchange.

Frequently Asked Questions

How much will India’s coffee exports drop in 2023?

India’s coffee exports are expected to fall by 15% in 2023, with total shipments predicted to be lower than the 2011 record of 346,900 metric tons.

Why is India exporting less coffee this year?

Lower exports are due to reduced demand from Europe, especially economically troubled countries like Italy and Greece, along with shrinking domestic coffee inventories and cautious buyer behavior.

Which countries buy the most Indian coffee?

Europe is the largest buyer of Indian coffee, accounting for around 70% of total exports, with Italy and Greece being among the key markets.

What’s happening with arabica and robusta coffee prices?

Arabica prices are expected to remain stable for now, but robusta prices could drop by about 10% by March 2023 due to a global production surplus.

How much coffee is Vietnam producing this season?

Vietnam, the top exporter of instant coffee beans, is forecasted to produce 9% more coffee this season, reaching 21.25 million bags.

What are current coffee futures prices?

As of December 30, March-delivery arabica coffee futures traded at $2.2685 per pound, and robusta futures at $1,810 per ton.

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