Faced with increasing competition in their traditional markets, mainly Italy, India’s coffee exporters have begun to eye speciality and niche segments to realize better value, industry officials said.
Italy accounted for 40,000 tonnes of Indian coffee annually and it has been growing at the rate of 15% in the past five years, but an aggressive Vietnam has narrowed down the price parity with desi exports substantially.
“We were getting a premium of around $450 per tonne over Vietnamese coffee, but it has come down to less than $200,” president of India’s Coffee Exporters Association, Ramesh Rajah, said. India is estimated to account for 4% of the world’s coffee production, ranking seventh globally. It shipped 2.4 lakh tonnes in the calendar year 2006.Over 70% of India’s coffee production is exported.
Rajah said addressing speciality segment and niche markets would be key for Indian coffee exporters to realize better value. “The main growing segement is the speciality segment, looking at niche marketing where we can get better prices,” he said.
“Now, we are looking at other segments in the US; people are moving into Japanese markets. We are now looking more towards fragmenting and going after niche markets, rather than dumping our products at any price. That’s the future.Future lies in getting a better value for your products.”
Chairman of the state-run Coffee Board of India G.V. Krishna Rau stressed on the need for Indian exporters to move up the value chain.
Rau said: “Look at the country as a whole.What are we doing? We are exporting coffee beans... green beans. What’s green beans? (It is) primary agricultural produce. How many more centuries should India export primary agricultural produce without any value addition?” According to Coffee Board officials, value-added coffee products yield significantly higher earnings for coffee exporters compared with green beans.