Kochi: A nearly 40 per cent slump in the production of robustacoffee
has hit instant coffee exports, which were growing steadily for the past few years.Robusta crop
is the mainstay of instant coffee.
Scarcity has made Indian beans costlier than overseas produce, which has become cheaper following a good harvest in Brazil, the largest producer.
Major exporters such as CCL Products and Tata Coffee use more imported beans for reexport but they are also feeling the pinch. “Global prices have fallen and we are feeling competitive pressure, though we have been able to hold our prices through new products, certification and sustainability,’’ said Chacko Thomas, managing director, Tata Coffee, which has plantations in southern India and Vietnam.
Since the beginning of 2019, instant coffee exports are down 10 per cent year on year at 111,479 tonnes while overall coffee exports from India have declined only marginally. A major fall happened in the first quarter of 2019-20. India’s instant coffee exports stood at 116,563 tonnes in 2018-19, nearly double of what it was a decade ago.
CCL Products, which sources around 15 per cent of the beans from India, expects the situation to improve in the second half of the year. “The first few months of the fiscal year are generally lean period for exports. It can get better in the second half,’’ said Challa Shrishant, managing director, CCL Products, which is the largest instant coffee exporter from the country.
For smaller players, the situation has become more difficult in the highly competitive market. Robusta beans are currently priced at Rs 140-150 per kg, compared with around Rs 100 per kg last year.
“Prices in India are about 20 per cent higher than global rates, which have increased our cost of production. A significant part of our instant coffee export is from beans sourced locally,’’ said N Sathappan, director, SLN coffee.
The company also imports beans for value addition and export. “Even if we import it cheaply, export is difficult as there is heavy disparity in prices,’’ said Sathappan. “Buyers are able to source cheaper coffee from other origins like Vietnam. Our annual instant coffee export is about 5,000 tonnes. We expect at least 20 per cent fall,’’ he said.