The global coffee market is at a crucial juncture, particularly for Indian exporters, as the European Union Deforestation Regulation (EUDR) faces a probable implementation delay. Originally set to enforce on December 30, 2025, the EUDR restrictions require exporters to provide thorough evidence that coffees have not been sourced from deforested land post-December 2020. For India, newly classified as “low-risk” and already enjoying a prior extension, an additional year of respite is likely. The European Commission’s proposal, pending discussions with EU Parliament and member states, is set to offer coffee producers and traders essential breathing space amidst ongoing compliance challenges and shifting trading conditions.
Amid these regulatory headwinds, trade volumes have contracted, with Indian exports dropping by 11% in 2025 year-to-date. This decline owes much to EUDR-driven demand from European buyers, high international coffee prices, and operational uncertainty. Yet, the sector is showing resilience: over 13,000 growers have registered on a new Coffee Board compliance app, and most exporters have already made significant investments in monitoring systems, indicating readiness to adapt once legal clarity emerges. Europe’s demand remains the critical anchor, with the region buying coffees worth over USD 1.81 billion from India last year. As the implementation timeline stretches, exporters anticipate an eventual rebound, notably when the new crop reaches the market and compliance hurdles temporarily recede. Market participants should watch for the official delay confirmation, incoming harvests, and the evolving EUDR discussions. Meanwhile, global fundamentals and weather developments, particularly in South America and Asia, continue to shape price trends and supply risks for the next quarter.
📈 Prices – Latest Exchange Data
| Exchange | Product | Closing Price | Weekly Change | Market Sentiment |
|---|---|---|---|---|
| ICE US | Arabica Coffee (KC Jul 24) | EUR 4470.60/MT | -2.1% | Neutral-to-Bearish |
| ICE Europe | Robusta Coffee (RC Jul 24) | EUR 3867.00/MT | -1.5% | Neutral |
Key Insights:
- Arabica and Robusta futures both eased this week due to profit-taking and improved weather outlooks for Brazil.
- Market sentiment cooled as earlier weather fears have partially subsided, but volatility remains high.
🌍 Supply & Demand Drivers
- Indian exports: Down 11% in 2025 YTD, pressured by high prices and EU compliance uncertainty.
- EUDR Delay: Possible new 1-year postponement; a key positive for near-term Indian and other origin exports to the EU.
- Europe: Still India’s core market; over USD 1.81 billion in imports during FY 2024–25.
- Compliance Tech: Widespread adoption of traceability tools and registration among Indian growers (>13,000 registered).
- Buy Side Behavior: Some European buyers seek EUDR-compliant lots; others may push for lower prices if delay confirmed.
- Speculative Positioning: Net long positions in coffee futures trimmed over concerns of larger upcoming harvests in Brazil and Vietnam.
📊 Fundamentals & Global Comparison
| Country | 2024/25 Production (MT) | 2024/25 Exports (MT) | End Stocks (MT) |
|---|---|---|---|
| Brazil | 66,300,000 | 43,800,000 | 3,700,000 |
| Vietnam | 27,700,000 | 25,600,000 | 2,100,000 |
| India | 5,900,000 | 5,150,000 | 0,400,000 |
| EU (Import Demand) | – | 46,800,000 (Imports) | – |
- Brazil and Vietnam remain dominant global suppliers, though India is a key origin for specialty and certified coffees in Europe.
- Stocks at origin are tight but new crops, weather-permitting, should help rebuild inventories from Q3 onward.
🌦️ Weather Outlook for Key Coffee Regions
- Brazil: Intermittent rains have improved flowering and bean development, though localized dryness prevails in Minas Gerais.
- Vietnam: Wetter-than-average May and early June improve soil moisture; harvest prospects up from last month’s drought fears.
- India: Monsoon onset has been patchy in Karnataka and Kerala; good follow-up rains needed for robusta settings and yield realization.
- Overall, no major immediate weather threats, but the risk of El Niño reemergence could inject volatility in late 2024.
📆 Trading Outlook & Recommendations
- Indian Exporters: Use the EUDR delay to build compliant inventory and reassure European buyers; consider offering flexible contract terms as demand shifts.
- Origin Sellers (Brazil/Vietnam): Lock in forward sales during price rallies; manage downside risk as new crops enter the market.
- Importers: Monitor European policy debates on EUDR closely; anticipate some price relief and greater origin flexibility through H2 2025.
- Speculators: Mixed signals; consider range trading with technical stops as weather, regulations, and macroeconomic news move markets.
📉 Three-Day Price Forecast (Key Exchanges)
| Date | ICE US Arabica (EUR/MT) | ICE Europe Robusta (EUR/MT) |
|---|---|---|
| Day 1 | 4475 – 4500 | 3860 – 3890 |
| Day 2 | 4480 – 4520 | 3875 – 3910 |
| Day 3 | 4490 – 4540 | 3890 – 3930 |
- Forecast Summary: Prices broadly stable with moderate upward bias if compliance delay is officially confirmed and weather remains favorable in major growing areas.
