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

India is the earliest country in Asia to grow coffee, and its output ranks sixth in the world. Recently, the price of coffee has continued to rise. The reason for the rise in price is that Vietnam has suffered from heat waves and droughts, affecting the output of Robusta coffee beans, resulting in a supply crisis, and indirectly pushing up the price of Arabica coffee. This situation is a good news for India, which also leads to the growth of Indian coffee exports and drives Indian coffee to be more popular in the global market.

Recently, Indian government data shows that in the early first quarter of 2024, India exported a total of 125,600 tons of coffee, an increase of 13.35% compared with 110,800 tons in the same period last year. This is mainly due to the growth in global coffee demand, especially the increase in demand for Robusta, and the main producing countries of Robusta, Vietnam and Indonesia, have encountered reduced production due to weather changes.

It is understood that Indian Robusta coffee is planted in the direction of gourmet coffee during the planting process, using shade planting, manual picking, and natural sun drying, so the quality is higher, and therefore the price is higher. However, the recent sharp rise in the price of Robusta has made the price of Indian Robusta coffee no longer expensive. Therefore, the market expects that the number of Indian coffee exports will jump from 271,000 tons last year to 298,000 tons.

Although the rise in coffee prices has helped Indian coffee exports, it has also led to problems in the supply of coffee. According to local traders, currently, some Indian coffee growers are reluctant to deliver coffee beans at the previous pre-order price, resulting in export problems for the country. And it is stated that if these situations continue to occur, it will greatly hit the trust of traders in Indian coffee, resulting in a reduction in new export orders for Indian coffee.

In addition, according to the statistical data released by the Indian Coffee Board, the five major export destinations of Indian coffee are Italy, Germany, Belgium, Russia, and Jordan. However, India’s import and export is very dependent on the Red Sea route, but the current Red Sea crisis continues, which has caused significant losses to India’s import and export.

According to the data released by India, the goods passing through the Red Sea route account for 50% of India’s export value and 30% of import value. Therefore, the Red Sea crisis will cause a 30 billion US dollar export loss for India. And in order to bypass the Red Sea and detour around the Cape of Good Hope, it will increase the transportation cost of India’s international trade by 161%. Therefore, India will send its military power second only to the United States to the Red Sea for escorting.