Analysis of economic trends in overseas markets for Indian tea and coffee

Abstract

Since world market economies are dynamic, the responsiveness of export quantities to changes in international prices is of direct relevance in international economics. India has 12% share of world tea exports and is the seventh largest coffee producer in the world (2013–2014). This study analyses the exports and price growth rates, elasticity, instability and major global markets for Indian tea and coffee. The study was based on 24 years agricultural time-series data from 1990–1991 to 2012–2013. The study found that elasticity for coffee and tea was 61.4 and 13.5%, respectively. The destinations which account for the major share of exports for Indian tea are developed countries including Australia (18.7%), Russia (17.3%), and the United States (15.9%) and for coffee are Italy (28.7%), Germany (13.8%), and Belgium (7.6%). Based on an analysis of individual country elasticity and growth rates, India has comparative advantage to export to the Middle East, Europe, the United States, and Australia.

Keywords

global markets export prices market dynamics multispeed world

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