Time to spill: India’s coffee production is holding near 6 million bags for the 2025/26 season, but the battle for global market share is intensifying. Excessive monsoons battered yields, yet USDA data shows output barely dipping below last year’s levels. The real story? Brazil’s aggressive push into European markets is reshaping the competition, and India’s farmers are feeling the pressure.
The USDA report paints a mixed picture. Arabica yields fell 3%, robusta 2%, as monsoon rains flooded southern India—especially Karnataka, the heart of the country’s coffee belt. While soggy soil boosted short-term growth, fungal diseases and fruit splitting are now major risks. The 10% rainfall spike in key districts has created a paradox: better conditions for crops, but worse outcomes for farmers. Meanwhile, India’s export forecast slumped 3% to 5.99 million bags, as European buyers shift to shorter contracts and cautious buying. The shift? Higher green-bean prices have forced roasters to prioritize immediate needs over long-term deals.
India’s domestic market is a different story. Consumption is projected to rise 19% to 1.36 million bags, driven by soluble coffee’s 70% market share. But per-capita use remains a fraction of the global average—just 0.07kg versus 1.3kg. New tax cuts on instant coffee, now matching filter coffee’s 5% rate, aim to bridge that gap. Retail prices could drop 11-12%, a sweetener for a market still dominated by imports. Yet farm-gate prices in Karnataka are soaring: arabica parchment up 58%, robusta cherry up 10%. The gap between India’s quality and Brazil’s supply crunch is widening, with global buyers favoring India’s premium beans despite the cost.
The U.S. and Europe are now battlegrounds. Brazil’s coffee is flooding the U.S. after tariffs dropped to zero, while Europe faces a dual threat: Brazil’s volume and India’s quality. Ending stocks hit 165,000 bags—the highest in three years—but still tight by historical standards. Sustainability standards from the Coffee Board of India hint at a future where the country balances niche exports with domestic growth.
Can sustainability standards outpace Brazil’s dominance, or will the global market continue to favor the world’s largest producer.
What’s next for India’s coffee? Can sustainability standards outpace Brazil’s dominance, or will the global market continue to favor the world’s largest producer? Weigh in—what’s your take?
Questions & Answers
What caused India’s coffee production to drop?
India’s coffee production fell slightly due to increased competition from Brazil, which offers lower prices and higher yields, affecting Indian farmers’ market share and profitability.
How is Brazil impacting India’s coffee industry?
Brazil’s competitive pricing and higher productivity are challenging India’s coffee industry, leading to reduced production and pressure on Indian growers to improve efficiency and quality.
Information sourced from industry reports and news outlets.
