Indian coffee exporters are experiencing a positive shift in the winds of demand, with key markets in Europe and West Asia among the first to place orders for the freshly harvested arabica coffee crop. The anticipation is like a shot of espresso in the arm of the industry.
Arabica Harvest Brings Mixed Signals
The arrival of the new arabica crop has triggered a surge in demand, but exporters are cautiously treading the ground. The unpredictability of the upcoming crop size has left some hesitant to plunge into larger contracts. The harvest, which started a month earlier due to erratic rainfall, faces contradictory reports, causing a brief slowdown in arrivals.
Expectations for Coffee Crop In the Year 2023-24
The shipments of the new arabica crop for the upcoming year are slated to commence in January. Exporters are eyeing a recovery in coffee prices, especially for arabica, with the belief that they are currently lower than previous levels. The robusta market, on the other hand, remains stable, offering a contrasting narrative.
The President of the Coffee Exporters Association expresses optimism about the future trajectory of coffee prices. While robusta prices are deemed favorable and expected to hold steady, the anticipation is for arabica prices to rebound from their current state. The market is akin to a finely brewed blend, with the aroma of positive change lingering in the air.
Weathering Challenges in Financial Year 2023-24
Despite facing a 6.5% dip in volume in the current financial year (April 1 to Nov 28), India’s coffee shipments showcase resilience. The drop in volume is overshadowed by a 6% increase in value terms, reaching $775 million. The industry, like a seasoned barista, continues to serve up value even in challenging times.
Sustainability Buzz – EU Regulations and the Indian Coffee Landscape
Against the backdrop of evolving global norms, exporters are now fielding inquiries for Indian coffees aligned with the proposed European Union regulation on deforestation-free products (EUDR). Scheduled to take effect from January 1, 2025, EUDR demands compliance from EU-based companies to ensure their imported products are deforestation-free.
Stakeholder consultations led by the state-run Coffee Board indicate a proactive approach to meeting EUDR norms. With panels comprising experts and industry representatives, a compliance mechanism is in the works. The industry, like a robust blend, is adapting to global norms and positioning itself for a sustainable and vibrant future.
The coffee market’s resilience and adaptability to changing global dynamics are commendable. As we steer uncertainties, the aroma of positive change lingers, and we believe the industry is well-poised for a robust future.