Brewing Storms and Lean Harvests -Perils in the Coffee Commodity

Brewing Storms and Lean Harvests -Perils in the Coffee Commodity Sipping on Troubles as the Bean Market Faces a Downturn

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In the world of coffee, where the aroma of anticipation usually fills the air, a different scent lingers this season. Coffee exporters gaze at a landscape where the order books appear as thin as a wafer. The reason? The coffee crop for 2023-24 promises to be a tad more modest than the previous year, a bitter aftertaste attributed to the capricious weather that has cast its shadow on the arabica coffee output.

Weather factor

The President of The Coffee Exporters Association of India paints a picture of the scene, expecting arabica production to waltz around 0.08 million tonnes and robusta to perform a more robust routine at about 2.7 million tonnes. A noticeable dip compared to the previous year’s arabica production of 0.1 million tonnes and robusta standing at 2.52 million tonnes, culminating in 3.52 million tonnes. The Coffee Board’s preliminary estimates for 2023-24, donned in the aftermath of blossoms, present a hopeful output of 3.74 million tonnes, comprising arabica’s 0.11 million tonnes and robusta’s 2.61 million tonnes. However, this optimism is veiled with caution as the erratic weather, featuring untimely and uneven rains and a prolonged dry spell during the monsoon, might play the spoilsport.

Untimely blossoms

The repercussions of this climatic unpredictability are felt keenly in Karnataka, the powerhouse responsible for over 70 percent of the country’s coffee yield. Growers in this region foresee a slump in the crop due to the erratic weather patterns that have a knack for disrupting both yields and quality. However, the chairman of Upasi Coffee Committee takes a bleaker view, projecting a potential 25-30 percent drop from the Coffee Board’s initial estimate of 3.74 million tonnes. The ongoing harvest of arabicas initiated a month earlier due to untimely blossoms is crucial for determining the output trajectory.

On the export front, the horizon appears overcast

Experts reveal that the outlook for exports lacks bullish fervor, attributing it to slow-buying dynamics influenced by economic conditions in consumer countries and concerns over proposed regulations on deforestation-free product imports in the European Union. The order books, standing at 5 percent lower than the previous year, echo the cautionary rumor of a market facing headwinds.

In this challenging climate, where the aroma of fresh brews usually signals prosperity, the coffee market braces for a period of uncertainty. Shipments in the current financial year show a 6.5 percent volume dip, underscoring exporters’ challenges. As the coffee beans traverse troubled waters, their journey to market shelves is painted with hues of adversity.

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