According to a Global Agricultural Information Network report from the United States Department of Agriculture’s Foreign Agricultural Service (FAS), India’s coffee production for the market year (MY) 2023/2024 is expected to be 5.9 million 60-kg bags, representing a 2% increase from the previous estimate.

The FAS report details that Arabica’s output is projected to reach 1.4 million 60-kg bags (85,200 metric tons (MT)), while Robusta’s production is anticipated to be 4.5 million 60-kg bags (271,800 MT).

On their part, the Coffee Board of India forecasts post-blossom (pre-monsoon) Arabica and Robusta production for MY 2023/24 at 113,000 and 261,200 MT, respectively.

In July 2023, the Coffee Board of India finalized its MY 2022/23 output estimate at 5.8 million 60-kg bags (352,000 MT), with Arabica contributing 1.6 million 60-kg bags (100,000 MT) and Robusta accounting for 4.2 million 60-kg bags (252,000 MT).

According to trade sources, the MY 2022/23 Arabica production is expected to be 15% lower at 1.4 million 60-kg bags (85,000 MT), primarily due to the prevalence of white stem borer during the season.

Robusta yields are anticipated to be 1,187 kilograms per hectare, significantly surpassing the three-year and five-year averages, based on typical November precipitation. In contrast, Arabica yields are expected to be 416 kilograms per hectare.

The FAS report forecasts MY 2023/24 coffee consumption at 1.2 million 60-kilogram bags (76,200 MT), reflecting a 1% decrease from the previous projection.

This dip is attributed to reduced demand resulting from the increased sales of soluble coffee for at-home consumption via e-commerce and retail channels.

Moreover, it outlines that household consumption of soluble coffee will constitute 70% of domestic consumption in MY 2023/24, which will be supported by the expansion of the hospitality (hotels, restaurants, catering events) and institutional (corporate offices, airports) sectors.

In terms of carryover stocks, the report anticipates MY 2023/24 to be 60% lower than the prior projection of 179,000 60-kg bags (10,700 MT).

This reduction is credited to robust export sales to Jordan, Turkey, Tunisia, and the UAE. Prices are projected to undergo a slight correction when peak arrivals commence in mid to late-December.

The trend of low carryover stockpiles is expected to persist, influenced by robust exports observed in the past two years.

The report further predicts MY 2023/24 exports to amount to 6.3 million 60-kilogram bags (380,000 MT), consistent with the prior projection.

Despite the expectation of sustained export demand, trade sources indicate that existing prices are hindering international customers from making larger purchases.

As indicated by statistics from the Coffee Board of India, green bean prices for Arabica coffee have declined by 23% since June 2023, driven by expectations of higher-than-anticipated global supplies.

Robusta cherry prices have also decreased by 5% since June 2023 due to optimistic export demand forecasts.

Trade sources report that exporters are diversifying, with increased shipments to markets such as the UAE, Jordan, Turkey, Tunisia, Libya, and Egypt.

However, the top export destinations in MY 2022/23 (Oct/Sep) remained Italy (14% market share), Russia (9% market share), Germany (9% market share), and Belgium (6% market share).

FAS reports also project 1.5 million 60-kilogram bags (93,000 MT) in MY 2023/24, consistent with the prior projection.

The majority of imported coffee is processed for re-export, benefiting from tariff exemptions and lower overall prices.

Notably, around 97% of total imports are green beans for processing imported from Indonesia, Vietnam, Kenya, and Uganda in response to increased demand for soluble coffee in MY 2022/23.