India’s coffee exporters are facing a new wave of competition from African producers as the price gap for Indian beans, particularly robustas, continues to widen.
Over the past several months, premiums for Indian coffee have surged, narrowing the country’s price advantage in global markets and giving room for origins like Uganda and Ethiopia to gain ground in Europe and the Middle East.
Differentials for Indian robusta parchment AB now stand between $1,200 and $1,300 per tonne above London’s benchmark prices, according to exporters. Back in January, those premiums were closer to $800–900 per tonne. The robusta cherry AB variety has followed a similar path — rising from $200–250 per tonne at the start of the year to $750–850 today.
For Indian exporters, those numbers tell a worrying story.
“Indian prices are very high, which is giving the other countries an opportunity to try and penetrate our markets,” said Ramesh Rajah, president of the Coffee Exporters Association.
He said Ugandan exporters, in particular, have been offering significantly lower prices, making inroads into Europe — India’s largest export market. “Our buyers are attempting to price up part of Uganda and reduce the off-take of India. That is a complaint we are getting from all exporters,” he said.
The same trend, Rajah added, is visible in the Middle East, where Ethiopia is “trying to push aside India.”
For decades, Indian coffee has commanded a premium, marketed as high-quality and distinct in flavor. But that advantage, Rajah said, is under pressure.
“Normally, we do sell at a premium and we use that as a tool for marketing, saying that our coffee is the best,” he said. “But now, with these very high prices and a very high gap in the differentials, many roasters and consumers are attempting to try other origins, and the classic case is Uganda.”
Earlier, the gap between Indian and Ugandan coffees was relatively modest — about $100–200 per tonne. Now, Rajah said, it has widened to $300–400. “Consumers are attempting to try. They are selling $300–400 cheaper than Indian coffees. So many of the buyers are attempting to use some quantity of Uganda,” he said, adding that while roasters are unlikely to abandon Indian coffee completely, “the quantity they buy will reduce.”
Europe remains India’s largest market, taking in more than half of the country’s coffee exports. Italy and Germany are the biggest buyers. India ranks as the world’s fifth-largest exporter, but it is grappling with a tougher landscape shaped by high global prices and supply issues in top producers Brazil and Vietnam — both affected by erratic weather.
Those supply disruptions have pushed prices sharply higher over the past two years, straining roasters and consumers alike. Uncertainty around U.S. tariffs has further fueled volatility in the global coffee trade.
Now, analysts are adjusting their forecasts. In a recent report, BMI, a research arm of Fitch Solutions, revised its global coffee price projection upward, from $3 per pound to $3.40, citing the rally driven by U.S. tariffs on Brazilian beans.
“We believe that these high prices are increasing the likelihood of a deal being reached between the U.S. and Brazil to exempt coffee from the 50 per cent tariffs,” BMI said, suggesting that prices could ease once a deal is struck.
Still, the outlook remains uncertain. “We highlight the fluidity of U.S. policy as a key risk,” BMI added, noting that the next few months will depend heavily on Vietnam’s harvest and Brazil’s weather — two variables that could either cool or extend the current rally.
