India’s Robusta coffee price continue to rise due to supply issues in Vietnam
Prices for robusta coffee continue to rise in India, in line with the global trend of supply issues in Vietnam, the largest producer, while arabica prices remain largely stable.
Prices for robusta cherry, a popular variety in the country, recently reached ₹10,000 for a 50-kg bag and are now around ₹10,400 at the farmgate. Robusta cherry prices have risen by nearly a tenth since early April, and more than 50% since early January.
Robusta parchment prices have reached a record high of ₹18,300 per bag, a 66% increase from early January levels. Globally, robusta futures at the ICE have increased by more than 60% in the year to date.
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Growers are in no hurry
Ramesh Rajah, President of the Coffee Exporters Association, attributes the rising price trend in robustas to lower availability from Vietnam. In addition, demand from European buyers ahead of the year-end deadline for the EUDR (European Union Deforestation Regulations) is helping to drive up prices.
According to Rajah, some growers are still hesitant to sell because they believe prices will continue to rise. “We believe 70% of the coffees have been sold, with the remaining 30% still with the growers,” Rajah said, adding that it was only a “guess.”
According to Coffee Board data, India’s coffee exports in the calendar year 2024 through July 11 increased by 11% to 2.53 lakh tonnes (lt) from 2.28 lakh tonnes the previous year. The increase has been driven primarily by higher demand for robusta cherry, followed by instant coffees. Robusta cherry exports increased by 18% from January 1 to July 11, reaching 1.19 lakh tonnes compared to 1.01 lakh metric tons the previous year. Instant coffee shipments, including re-exports, were up more than 11% to 82,771 tonnes.
Opportunity for India
Praveen Kumar Kolimarla of Agrani Coffee and Commodities Ltd, which sources beans for exporters and roasters, stated that robusta availability and prices remain extremely tight due to supply issues in Vietnam and Indonesia. “With Vietnam and Indonesia not selling coffee, there is an opportunity for India. Also, with the monsoon season underway, there is some liquidity available, and growers are releasing more coffees in response to buyer demand,” he stated.
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In its most recent outlook, BMI, a Fitch company, expects coffee markets to remain buoyant despite supply issues from key producers such as Vietnam and Brazil. “Continued stock accumulation could create some headwinds for price development in H2 2024. Meanwhile, rainfall and water reservoir levels in Vietnam will be monitored as the coffee robusta harvest peaks in November 2024-February 2025; replenishment is critical if further production declines are to be avoided.” BMI reported.
Furthermore, the earlier dissipation of the 2023-2024 El Nino event and the expected onset of a La Nina event in August-October 2024 represent a positive shift in terms of rainfall levels in South-East Asia. “Further ahead, the Brazilian coffee harvest is set to return to an off-cycle in MY2024/25, which tends to be linked to an annual decline in domestic coffee production, which may augur further market tightness,” according to the report.
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