By Emmanuel Nduka Obisue
Indian coffee exporters are facing mounting competition from other producing countries, notably Uganda and Ethiopia, as premiums for robusta varieties from India have surged in recent months.
The differentials for Indian robusta parchment AB currently hover between $1,200 and $1,300 per tonne over LIFFE (London International Financial Futures Exchange) prices, up from $800–900 in January. Similarly, robusta cherry AB is trading at premiums of $750–850 per tonne, compared to $200–250 earlier this year.
Ramesh Rajah, President of the Coffee Exporters Association, said the steep rise in Indian coffee prices is allowing competitors to capture market share in key regions.
“Indian prices are very high, which is giving other countries an opportunity to penetrate our markets,” Rajah said. “Most exporters are complaining that Uganda is competing in Europe, offering much lower prices. Buyers are now trying to substitute part of their Indian coffee with Ugandan. In the Middle East, Ethiopia is also pushing aside India. We are seeing much more competition because of pricing,” he added.
Rajah explained that while India has traditionally marketed its coffee at a premium to emphasize quality, the widening gap is prompting roasters and consumers to experiment with cheaper origins.
“Earlier, the price gap between Indian and Ugandan coffees was about $100–200 per tonne. Now it’s $300–400. Consumers are trying Uganda because it’s that much cheaper. They cannot stop buying Indian coffee completely, but they’re reducing quantities,” he said.
Europe remains India’s largest market, accounting for 55–60% of exports. Italy and Germany are the top buyers. However, the global surge in coffee prices, driven by weather-related supply issues in Brazil and Vietnam, has tightened consumer budgets. Added uncertainty over US tariffs on Brazilian coffee has further fueled volatility.
Meanwhile, research agency BMI, a Fitch Solutions company, has raised its coffee price forecast following the recent rally.
“We are revising our forecast upward from $3 per pound to $3.40, largely due to US tariffs against Brazil,” BMI said in its latest report. “We believe these high prices could increase the likelihood of a deal to exempt coffee from the 50% tariffs, which may ease prices from current highs,” the report added.
The agency also cautioned that US policy shifts, Vietnam’s upcoming harvest, and weather conditions in Brazil remain key variables influencing market direction.
