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Coffee Market Report 2021

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Coffee Market Report 2021 Coffee Exports from India: How the market has stirred up Commodity In Focus Commodity In Focus Global Dominance of Coffee For some, the day begins with making a fresh under HS Codes 210111. Analyzing India’s pot of coffee at home, and for others, it starts competitors in the coffee market, with the usual coffee run to their favorite local understanding the impact of covid-19 on this cafe. Whatever the means to get a quick sector are also some areas that we will study caffeine fix, coffee has become an irreplaceable here. There are two primary varieties of staple in most of our day-to-day lives. Archives coffee - Robusta and Arabica. and legends illuminate the possibility that coffee originated in Ethiopia.2 However, today, coffee is produced in more than 50 countries worldwide, with each region growing its local Coffee is one of the world’s most variants. popular commodities, and as of This report will examine the coffee trade 2020, the coffee market was valued across India and the globe from a principal at around US$ 466 billion.1 commodity perspective: HS Codes 0901 and allied processed products/preparations falling Fig. 1 - Constituents of Coffee Exports from India in FY21 1% Coffee Preparations 22% Coffee Beans HS 210111 HS 0901 35% 65% Robusta 42% Arabica Others Total: US$ 720 Mn *Source: Ministry of Commerce and Industry, DGFT https://azothanalytics.com/report/food-beverage-and-agriculture/global-coffee-market-value-volume-analysis-by-coffee-beans-distribution-channel-by-region-by-country-2021-edition-market-insights-covid-19-impact-competition-and-forecast-2021-2026 https://azothanalytics.com/report/food-beverage-and-agriculture/global-coffee-market-value-volume-analysis-by-coffee-beans-distribution-channel-by-region-by-country-2021-edition-market-insights-covid-19-impact-competition-and-forecast-2021-2026 https://azothanalytics.com/report/food-beverage-and-agriculture/global-coffee-market-value-volume-analysis-by-coffee-beans-distribution-channel-by-region-by-country-2021-edition-market-insights-covid-19-impact-competition-and-forecast-2021-2026 https://azothanalytics.com/report/food-beverage-and-agriculture/global-coffee-market-value-volume-analysis-by-coffee-beans-distribution-channel-by-region-by-country-2021-edition-market-insights-covid-19-impact-competition-and-forecast-2021-20261. Global Coffee Market Report https://azothanalytics.com/report/food-beverage-and-agriculture/global-coffee-market-value-volume-analysis-by-coffee-beans-distribution-channel-by-region-by-country-2021-edition-market-insights-covid-19-impact-competition-and-forecast-2021-2026 https://www.ncausa.org/about-coffee/history-of-coffee#:~:text=Coffee%20grown%20worldwide%20can%20trace,potential%20of%20these%20beloved%20beans https://www.ncausa.org/about-coffee/history-of-coffee#:~:text=Coffee%20grown%20worldwide%20can%20trace,potential%20of%20these%20beloved%20beans https://www.ncausa.org/about-coffee/history-of-coffee#:~:text=Coffee%20grown%20worldwide%20can%20trace,potential%20of%20these%20beloved%20beans https://www.ncausa.org/about-coffee/history-of-coffee#:~:text=Coffee%20grown%20worldwide%20can%20trace,potential%20of%20these%20beloved%20beans2. The History of Coffee https://www.ncausa.org/about-coffee/history-of-coffee#:~:text=Coffee%20grown%20worldwide%20can%20trace,potential%20of%20these%20beloved%20beans Coffee Report 2021 1 Commodity In Focus India majorly exports Robusta coffee beans, a Arabica counterpart. Thus, Robusta usually species of coffee bean that has low acidity sells at one-third the price of Arabica. Due to and high bitterness compared to Arabica its 25% higher caffeine content and cheaper coffee. While Arabica grows best in rich soil pricing than Arabica, Robusta is found in at high altitudes, the heartier Robusta prefers instant coffee, espresso, and as a filler in a higher temperature and can thrive on lower blended coffees. Apart from green coffee ground. The name ‘Robusta’ comes from the beans, preparations of coffee (31% of which is word ‘robust’ as its plant is resistant to instant coffee) also have a significant share in diseases and easier to maintain than its India’s export basket. Sector Deep Dive India’s Cup of Joe Coffee originated 400 years ago in India exporter of coffee by volume. For the 10 years when saint Bababudan brought seven shown in Fig. 2, India’s coffee exports have magical beans from Yemen and planted them declined at a Compounded Annual Growth in Karnataka’s Chandragiri hills. Rate (CAGR) of -3%. While part of this Today, though, the aroma of coffee has negative growth can be attributed to the enveloped us all. According to The Food and covid-19 pandemic, the industry has been Agriculture Organization (FAO) statistics experiencing poor growth and stagnation for data, India is the eighth-largest producer and a long time now. Fig, 2 - Indian Coffee Exports between FY12-21 953 969 866 843 814 822 799 784 739 720 Coffee ExportsCoffee (USD Mn) FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 *Source: Ministry of Commerce and Industry, DGFT Coffee Report 2021 2 Sector Deep Dive Indian coffee exports display a strong beans’ shipments in March 2020, which is the seasonal tilt, with exports peaking from key period for Robusta coffee harvesting and March to June (Fig. 3). In FY19-20, India’s exports. Further, due to the coffee exports reached a nine-year low in pandemic-induced lockdowns, the overall terms of its dollar value due to covid-19. The exports of coffee plummeted by 44% in April crisis significantly impacted green coffee 2020. Fig. 3 - Seasonality of Coffee exports 120 Exports (FY21) 5 year avg. Exports (FY2016-20) 100 97 80 76 73 72 72 60 54 52 48 47 46 41 45 40 Exports (USD Mn) 20 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar *Source: ITC Trade Map & DGFT However, through gradual unlock phases Baba Budangiri range in Karnataka is known and increasing economic activity, the fourth as the birthplace of coffee in India. So, it is no quarter of FY21 showed good recovery and surprise that Karnataka dominates the coffee a 10% year-on-year (Y-o-Y) growth. industry, accounting for most exports. The second-largest exporter, Andhra Pradesh, India is the only country that produces all of possesses many manufacturing plants that its coffee under shade. The commodity is process green coffee beans (Fig. 4). grown during the monsoon rainfall Chikmagalur and Coorg are the largest and conditions at different elevations along with most famous coffee-growing regions in various other intercrops. Coffee is cultivated Karnataka, followed by Araku Valley coffee in the traditional southern regions of the plantations in Andhra Pradesh. country like Karnataka, Kerala, Tamil Nadu, and the newly developed, non-traditional areas like Andhra Pradesh and Orissa in the Eastern Ghats of India. Coffee Report 2021 3 Sector Deep Dive Fig. 4 - Indian States Exporting Coffee (US$ Mn, FY20) Volume | Growth (CAGR FY15-20) Karnataka Telangana $443 Mn | (-3%) $12 Mn | (-8%) Andhra Pradesh Maharashtra $142 Mn | 3% $11 Mn Kerala Gujarat $69 Mn | 10% $4 Mn Tamil Nadu $55 Mn | (-3%) *Source Ministry of Commerce and Industry, DGCI&S Internationally, India’s coffee finds homes and Exports to the Middle East are usually made offices in Europe, wherein people prefer the up of Arabica coffee, the origins of which can stronger and more bitter flavors of the be traced back to the Arabia regions. In FY20, Robusta blend, which makes up 42% of Russia, Poland, the USA, Turkey, and India’s exports (Fig. 5). Italy, India’s largest Malaysia imported over 50% of coffee market, accounts for over 20% of bean coffee preparations (HS 210111) produced in India, exports. worth close to US$ 141 million. Fig. 5 - Top Importers of Indian Coffee in FY20 Top importers of Indian Coffee Italy $128 Mn Poland $30 Mn Germany $78 Mn Turkey $21 Mn Russia $61 Mn Jordan $21 Mn Belgium $47 Mn Kuwait $47 Mn United States $32 Mn Australia $32 Mn *Source: ITC Trade Map & DGFT Coffee Report 2021 4 Trade Watch Trade Watch From Shrub to Mug As per the International Trade Centre (ITC), is Brazil, while the leading importer is the USA more than US$ 30 billion worth of coffee (Fig. 6). Brazil harvests and exports almost 30% (eight billion tons) is traded every year. of the world’s green coffee beans, whereas the Globally, the top producer and seller of coffee USA imports 20% of the world’s coffee. Fig. 6 - Top 5 global exporters and importers of coffee USA $6218 Mn Brazil $5112 Mn Germany Germany $3571 Mn $3085 Mn Global Imports Global Exports France (USD) (USD) $2864 Mn Switzerland $2658 Mn Italy $1653 Mn Colombia $2604 Mn Japan $1392 Mn Vietman $2593 Mn Around the World Germany is the second-largest importer and green coffee beans. Germany roasts or even exporter of coffee. In 2019, it imported almost decaffeinates most of these green beans in its US$ 3.6 billion worth of green coffee beans, coffee roasteries located at Bremen, its coffee majorly from coffee-producing countries like capital. Some of this roasted coffee is further Brazil, Vietnam, and Honduras. And, it processed into instant coffee as well. Thus, re-exported close to US$ 3.1 billion worth of almost 86% of its coffee exports are coffee coffee to the USA, Poland, France, and many that has undergone some level of processing, other European countries. More than 70% of preparation, or packaging (Fig. 7). Germany’s coffee imports are unroasted Coffee Report 2021 5 Trade Watch Interestingly, there are only a few countries Fig. 7 - Types of Coffee Imported and Exported by Germany like India whose weather and terrain permit the cultivation of both tea and coffee. According to FAO statistics data, one such Germany Coffee Imports in 2019 nation is Vietnam, and the other is Indonesia, which as of 2019 are the second and the 1% 9% fourth-largest producers of coffee, 71% 18% 1% respectively.
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