Coffee exporters see pick-up in demand

Indian coffee exporters are beginning to see a pick-up in demand as buyers in key markets of Europe and West Asia among others have started placing orders for the new arabica coffee crop that’s currently being harvested.

“Demand is now picking up. People are accepting the war and there’s a feeling that arabica prices are lower than earlier and it’s better to buy,” said Ramesh Rajah, President, Coffee Exporters Association.

“The new coffee (arabicas) has started arriving. Many of the exporters are taking smaller orders but not getting into larger contracts as people are having contradictory reports on the upcoming crop size,” Rajah said.

This year, the harvest of arabicas has been advanced by a month due to the erratic rainfall pattern. The harvest of arabicas had began towards the end of October, but there’s a break now and suddenly the arrivals have slowed down, Rajah said. “We expect better buying from next month,” he said.

The shipments of new arabicas for the crop year 2023-24 are expected to start from January. The exporters see coffee prices recovering from the current level. “The robusta prices are good. We think it should retain at these levels, while arabica prices should recover from current levels,” he said.

Rajah expects the Indian green coffee shipments for the current financial year 2023-24 to remain at last year’s levels. The fourth quarter or Q1 of calendar 2024 should be on par at last year’s levels, he added.

Exports down

In the current financial year from April 1 till Nov 28, India’s total coffee shipments stood 6.5 per cent lower in volumes at over 2.44 lakh tonnes over same period last year’s 2.61 lakh tonnes. However, in value terms, the coffee shipments have been higher by around 6 per cent at $775 million over same period last year’s $733 million on higher prices. India had exported 3.96 lakh tonnes of coffee valued at $1.12 billion during fiscal 2022-23.

EUDR norms

Meanwhile, a section of exporters said they have started receiving enquiries from buyers for Indian coffees that are compliant to the proposed European Union regulation on deforestation free products (EUDR). From January 1, 2025, EUDR requires the EU based companies to ensure that the products they import are de-forestation free. 

The state-run Coffee Board held stakeholder consultations on Wednesday to put up a system to comply with the proposed EUDR norms. Panels comprising of faculty at the Indian Institute of Plantation Management and representative of growers and exporters have been formed to evolve a compliance mechanism for the EUDR norms that will come into effect from January 2025.