Indian Coffee Exporters Face Stiff Competition From African Producers Such as Uganda and Ethiopia
- Kodagu Express Bureau
- 1 day ago
- 3 min read
Madikeri: India’s coffee exporters are finding themselves squeezed as rising domestic prices for robusta varieties have opened the door for stronger competition from African producers such as Uganda and Ethiopia. The widening price gap has prompted several international buyers to explore cheaper origins, leading to concerns among Indian exporters about losing market share, particularly in Europe and the Middle East.
According to a report published in The Hindu BusinessLine, over the past several months, the premiums for Indian robustas — especially parchment and cherry grades — have climbed sharply. The price differential for robusta parchment AB is now between $1,200 and $1,300 per tonne over the London International Financial Futures Exchange (LIFFE) benchmark. In comparison, the differential in early January stood at $800–900 per tonne. Likewise, robusta cherry AB now trades at a premium of $750–850 per tonne above the London terminal price, up significantly from $200–250 at the beginning of the year.
The report says that the exporters say these steep prices are reducing India’s competitiveness in global markets. “Indian coffee prices are currently too high, which is giving other countries a chance to enter our traditional markets,” explained Ramesh Rajah, President of the Coffee Exporters Association told The Hindu BusinessLine. “Uganda, for instance, is offering much lower prices in Europe, prompting buyers to replace part of their Indian purchases with Ugandan coffee. In the Middle East, Ethiopia is doing the same — trying to edge out Indian coffees. Pricing is becoming a real challenge,” he said.
Rajah noted that Indian coffee has traditionally enjoyed a premium reputation in the global market. “We have always used our premium pricing as a marketing advantage, asserting that our coffee is among the finest. But with prices climbing so high and the differential widening, roasters and consumers are becoming more open to experimenting with other origins. Uganda is a clear example of that trend,” he added.
The situation has been aggravated by the expanding gap between Indian and Ugandan prices. “Earlier, the difference between the two was about $100–200 per tonne. Now it’s widened to $300–400. As a result, Ugandan coffee is selling much cheaper, and many buyers are blending or substituting part of their Indian coffee requirements with Ugandan beans. They won’t entirely stop buying Indian coffee, but the volume is definitely being reduced,” Rajah said.
Europe remains India’s largest market
India ranks as the fifth-largest coffee exporter globally, with Europe accounting for 55–60 per cent of total shipments. Major buyers include Italy and Germany, which primarily import Indian robusta for their blends. However, the recent global surge in coffee prices — driven by supply disruptions in Brazil and Vietnam, the top two producers — has already stretched consumers’ budgets. Adverse weather in both countries has constrained production, further fuelling the rally.
Adding to the uncertainty, trade tensions between the United States and Brazil have created additional volatility. Washington’s decision to impose tariffs on Brazilian coffee imports has contributed to a sharp increase in global prices.
Price forecast revised upwards
Reflecting these developments, BMI, a research arm of Fitch Solutions, has raised its coffee price forecast. “We are revising our forecast upwards from $3 per pound to $3.40 following the recent rally, which has been largely driven by the US tariffs against Brazil,” the agency said in its latest report. “However, we believe these elevated prices may eventually prompt negotiations between the US and Brazil to exempt coffee from the 50 per cent tariffs, which could lead to some price correction.”
BMI also cautioned that the coffee market remains highly volatile. “The fluid nature of US trade policy poses both upward and downward risks. Much will depend on the progress of the Vietnamese harvest in the coming months and weather conditions in Brazil, which will determine the flowering and yield of the next crop,” the report added.
To advertise on The Kodagu Express website, kindly call us at 9108795369 or mail us at thekodaguexpress@gmail.com
Join The Kodagu Express WhatsApp Group: CLICK HERE
Follow us on Instagram and X(Twitter)
Very motivating comments and lessons to help push production as well as quality to a higher level