Beginner's Guide: How to Start Coffee Export Business from India.

In this blog we are going to learn How to Start Coffee Export Business from India. Coffee is a popular beverage consumed by millions of people worldwide, and it is made from roasted coffee beans, which are the seeds of the Coffea plant. The drink has a long history and is deeply rooted in various cultures, with many people considering it a daily necessity. In addition to its widespread use as a beverage, coffee has various other uses, including in cosmetics and pharmaceuticals. Coffee is also a significant commodity in global trade, with several countries exporting it to meet the high demand. India, for example, is one of the world's largest producers and exporters of coffee, and the country's favorable climate conditions for coffee cultivation make it an attractive investment opportunity for coffee exporters.

India is one of the world's largest producers of coffee, and Indian coffee is well known for its unique taste, aroma, and quality. Coffee exports from India have been increasing steadily in recent years due to the country's favorable climate conditions for coffee cultivation and the government's support for the coffee industry.

Table of Content

1) Type of Coffee Beans

2) Top Exporting Countries of Coffee Beans.

3) Who are The Top Importing Countries of Coffee Beans

4) Who are the Top Indian Coffee Importing countries.

5) How to start Export Coffee from India

6) Conclusion

1) Type of Coffee Beans (What type of Coffee Beans founds in India)

Coffee plants produce different types of coffee beans, with over 120 varieties of coffee plants known. However, the majority of coffee consumed globally comes from just two types, Robusta and Arabica, or a blend of both. Arabica coffee beans are larger and oval in shape with a Centre crease, known for their vibrant and complex flavors, which are sweeter and softer with tones of fruits, florals, chocolate and nuts.

Arabica beans are generally more expensive than Robusta because they require specific cultivation conditions, such as altitude and weather, and have lower caffeine content. On the other hand, Robusta coffee beans have a simpler acidity, deeper and stronger flavor compounds, and are grown in altitudes of no more than 1000m, yielding more crops per tree, and are less vulnerable to pests and weather conditions.

Despite being called decaf coffee beans, all coffee beans naturally contain caffeine. The decaffeination process is carried out before roasting, using water, organic solvents, or activated carbon to extract caffeine from the beans. The decaf coffee beans will always contain some caffeine, as it is not possible to remove it all during the process.

The two primary coffee varieties grown in India are Arabica and Robusta. Arabica is mild, but its more aromatic beans command higher market value compared to Robusta beans. Arabica is grown in higher altitudes than Robusta and requires cool and equable temperatures ranging between 15°C to 25°C. On the other hand, Robusta needs hot and humid climates with temperatures ranging from 20°C to 30°C. It has a more robust flavor profile and is used in making various blends. The Coffee Board Seeds logo is a symbol of India's coffee industry, which continues to thrive due to the country's favorable coffee-growing conditions.

2) Top Exporting Countries of Coffee Beans.

1. Brazil - 2,700,000 metric tons

2. Vietnam - 1,650,000 metric tons

3. Colombia - 810,000 metric tons

4. Indonesia - 660,000 metric tons

5. Honduras - 380,000 metric tons

6. Ethiopia - 384,000 metric tons

7. Peru - 280,000 metric tons

8. India - 270,000 metric tons

9. Uganda - 270,000 metric tons

10. Mexico - 234,000 metric tons

Each country's coffee has unique characteristics and flavors due to differences in soil, climate, altitude, and processing methods. Here are some brief descriptions of each country's coffee:

1. Brazil - The largest coffee producer in the world, Brazilian coffee is known for its mild, nutty flavor and low acidity.

2. Vietnam - Mostly known for producing robusta coffee, which is strong and bitter, but also has a small amount of arabica production with fruity notes.

3. Colombia - Colombian coffee is known for its mild, balanced flavor and medium acidity, with notes of caramel, chocolate, and citrus.

4. Indonesia - Indonesian coffee is often described as earthy, spicy, and full-bodied, with notes of chocolate and nutmeg.

5. Honduras - Honduran coffee is known for its smooth, sweet flavor and bright acidity, with notes of chocolate, caramel, and fruit.

6. Ethiopia - Known as the birthplace of coffee, Ethiopian coffee is often described as fruity, floral, and complex, with notes of berries, citrus, and wine.

7. Peru - Peruvian coffee is often described as sweet and nutty, with notes of chocolate, caramel, and citrus.

8. India - Indian coffee is known for its strong, full-bodied flavor and low acidity, with notes of chocolate, spice, and nutmeg.

9. Uganda - Ugandan coffee is often described as bold and rich, with notes of chocolate, fruit, and floral aromas.

10. Mexico - Mexican coffee is often described as mild and smooth, with notes of chocolate, nuts, and citrus.

3) Who are The Top Importing Countries of Coffee Beans

Here are the top 10 coffee importing countries in the world by volume, as of 2022:

1. European Union (28 countries) - 45.5 million bags (60 kg each)

2. United States - 27.5 million bags

3. Japan - 7.8 million bags

4. Russia - 5.5 million bags

5. Switzerland - 3.6 million bags

6. Canada - 2.8 million bags

7. South Korea - 2.5 million bags

8. Turkey - 2.3 million bags

9. Australia - 1.5 million bags

10. China - 1.3 million bags

It terms of USD spending In 2021, coffee imports were dominated by 15 countries, which collectively purchased over three-quarters of the world's coffee supply. The United States topped the list, spending a staggering $6.9 billion on coffee imports, followed by Germany and France with $4.1 billion and $3.1 billion respectively. Italy, Belgium, Canada, the Netherlands, Japan, Spain, and Switzerland were among the other top importers, each accounting for a significant portion of the global coffee trade.

Interestingly, some countries showed a remarkable increase in coffee imports from the previous year. Belgium recorded a staggering 27% growth in coffee imports, while South Korea showed a 24.2% increase. The United States also saw a 21.9% rise in coffee imports, while Russia's import market grew by 20.7%.

Overall, these figures reflect the global love for coffee and the massive industry that has grown around it. The high demand for coffee from these top importers creates a significant opportunity for coffee producers and exporters worldwide.

4) Who are the Top Indian Coffee Importing countries. (Indian Coffee Export Position in world Ranking)

India is a significant player in the global coffee trade, with over 50 countries importing coffee from the country. Italy, Germany, Belgium, and the Russian Federation are the top importers of Indian coffee, accounting for about 45% of total coffee exports from India. Europe, particularly Italy, prefers the robusta blend, while the Arabica coffee blend is in high demand in the Middle East region. In 2019-20, Russia, Poland, the US, Turkey, and Malaysia imported coffee preparations produced in India worth approximately $141 million.

Indian coffee exporters are focusing on building a market share in Poland and the US for instant coffee. The country is the third-largest exporter of coffee to Poland, while coffee preparations exported to the US grew at a 9% CAGR. The top five importers of Indian coffee during 2018-19 were Italy, Germany, Russian Federation, Belgium, and Turkey. Of the total coffee produced in India, 70% is exported, and 30% is consumed domestically.

India's coffee exports are set to increase with the government's commitment to purchase all coffee produced in Manipur state, driving mass-scale coffee production in previously unsuitable areas. Moreover, Indian exporters are focusing on green coffee bean exports to Germany, with a 5% CAGR during the 2015-19 period. Overall, India's coffee industry remains robust, with significant potential for growth in both domestic and international markets.

India's coffee exports increased by 1.66% to 4 lakh tonne in 2022, thanks to the rise in instant coffee exports and re-exports. The country, which is Asia's third-largest producer and exporter, had exported 3.93 lakh tonne in 2021. The value of coffee exports also increased to Rs 8,762.47 crore in 2022 from Rs 6,984.67 crore in the previous year. While the shipment of Robusta coffee declined marginally to 2,20,974 tonne in 2022, the export of Arabica fell by 11.43% to 44,542 tonne. However, the export of instant coffee increased by 16.73% to 35,810 tonne in 2022. Additionally, 99,513 tonne of coffee were re-exported in 2022.

The rise in instant coffee exports and re-exports played a significant role in boosting India's coffee exports. The increase in exports in value terms indicates that the country was able to fetch better prices for its coffee exports. The decline in Arabica coffee exports could be attributed to the shift in demand towards Robusta coffee in the global market.

5) How to start Export Coffee from India (HS Code, EPC's, What are the documents required for start coffee exports business from the India, Government benefits)

Exporting coffee from India requires compliance with certain regulations and procedures, and the possession of necessary documents. Here are some important details to consider:

HS Code: The Harmonized System (HS) code for coffee is 0901 (09011100). This code is used to identify the product in customs and other documents related to export.

Export Promotion Councils (EPC's): The Indian Coffee Exporters Association (ICEA) and the Coffee Board of India are the two primary organizations involved in promoting coffee exports from India. They offer various services, including market research, trade fair participation, and financial assistance.

Documents required: Some of the key documents required for exporting coffee from India include:

• Import Export Code (IEC)

• Registration cum Membership Certificate (RCMC) from the relevant EPC

• Bill of Lading (B/L)

• Commercial Invoice

• Packing List

• Certificate of Origin (COO)

• Phytosanitary Certificate

• Fumigation Certificate

• Insurance Certificate

Government benefits: The Indian government provides various incentives to encourage coffee exports. Some of these benefits include:

• Merchandise Exports from India Scheme (MEIS): Provides a financial incentive in the form of duty credits to eligible exporters.

• Advance Authorization Scheme: Allows duty-free import of inputs required for export production.

• Export Promotion Capital Goods (EPCG) Scheme: Allows import of capital goods at zero or concessional customs duty rates for export production.

• Market Access Initiative (MAI): Provides financial assistance to promote exports of specific products and explore new markets.

The government of India is providing export incentives to promote the export of high-value and value-added coffees to important international markets such as the USA, Canada, Japan, Australia, New Zealand, South Korea, Finland, and Norway. A Rs. 2/- per kg incentive is given for exporting high-value green coffees to these markets, and a Rs. 3/- per kg incentive is given for value-added coffees in retail consumer packs exported as "India Brand." The selection of high-value markets will be reviewed after two years based on export performance, and countries may be added or deleted accordingly.

6) Conlusion

In conclusion, exporting coffee from India can bring several benefits to coffee growers, traders, and the Indian economy. By exporting high-value and value-added coffees to international markets, coffee growers and traders can increase their earnings and enhance their market share in important high-value markets such as the USA, Canada, Japan, Australia, New Zealand, South Korea, Finland, and Norway. The government's export incentives of Rs. 2/- per kg for high-value green coffees and Rs. 3/- per kg for value-added coffees in retail consumer packs exported as "India Brand" further encourage the growth of coffee exports from India.

Exporting coffee from India can also help to promote Indian coffee culture and enhance the reputation of Indian coffee in the global market. By promoting Indian coffee as a high-quality and unique product, exporters can attract more customers and increase demand for Indian coffee in international markets. This can lead to increased revenues and greater recognition for Indian coffee in the global market.

MHW Overseas is a leading export consultant that can provide comprehensive support for coffee exporters in India. They can assist with all aspects of the export process, including documentation, finding buyers, and providing shipment support. With their expertise and experience in the export industry, MHW Overseas can help coffee exporters in India navigate the complexities of international trade and maximize their export potential.

Overall, exporting coffee from India can bring numerous benefits to coffee growers, traders, and the Indian economy. With the support of export consultants like MHW Overseas, coffee exporters in India can take advantage of these benefits and succeed in the global market. By promoting Indian coffee as a high-quality and unique product, Indian coffee can become a sought-after commodity in the global market and contribute to the growth of the Indian economy.