2018 may not be hot for coffee exporter

India, Asia’s third-largest producer and exporter of coffee, witnessed 17 per cent growth in the last calendar year in terms of quantity. As per Coffee Board's data overall exports in 2017 jump to US$ 95.88 crore as against US$ 81.87 crore in the year 2016.

This may be attributed to excess production in the last year which resulted in a reduction in coffee prices. Lower price along with superior quality crop led to a spurt in the overall demand. However, going forward production of Robusta in India is expected to come down by ~20 per cent compared to 13.96 per cent (30,300 MT) as per the estimation of the Coffee Board.

On a full year basis, in 2017, coffee prices moved southward as two of the largest coffee producers i.e. Brazil and Vietnam expected a bumper crop. Vietnam’s production is forecast to rebound by 3.2 million bags to a record 29.9 million as an ideal weather will lead to good flowering and fruit-set.

With higher production in other countries, Indian planters and exporters are expected to witness price pressure in 2018. Further, southward movement in coffee prices might discourage planters to enhance production.

Below are US coffee prices during 2017.