The economic slowdown in Europe and the United States is making Indian coffee exporters jittery, as buyers in these geographies are seen delaying the orders for the new cropping season. Exporters are seeing thin order books for the year ahead, even as the harvest of new arabicas is set to begin over the next few weeks.

“The economic condition in Europe and the US is a concern. Europe is India’s main market. We are already seeing the impact of the slow transmission of the European and the US problems as the arabica shipments are down and the robusta shipments are up with buyers looking for less pricey coffees,” said Ramesh Rajah, President, Coffee Exporters Association.

Arabica shipments were down by 15 per cent at 37,617 tonnes during January-September 2022, as compared to 44,218 tonnes in the same period last year. Robusta exports were up 19 per cent at 1.86 lakh tonnes for the said period, as compared to 1.56 lakh tonnes in the same period last year.

Hesitation from buyers ad sellers

“In January, when the new crop comes in, we see could much more impact of the economic problems in Europe and the USA on our exports. The order books are also thin. Normally in September, we start taking orders for the next year’s shipments. I think there is hesitation both sides -- on the buyers side to give orders and exporter side to take orders,” Rajah said.

Further, Rajah said there are buyers asking for delayed shipments. “We are seeing shipments being put on hold. So far, it has not had a big impact. Going forward, depending on the depth of the economic problems there, the impact will be felt. The interest rates are being hiked sharply across the world. So buying and storing is also not a good idea. When buyers ask you to delay the shipments, you are going to see the impact of interest burden,” he said.

Exports up in H1

Over 70 per cent of the coffee produced in India is exported. Rajah said the exporters are projecting the Arabica crop for the 2022-23 crop year, which starts in October, is at about 80,000 tonnes and Robusta at over 2.7 lakh tonnes. The exporters’ crop projections for arabicas are lower than the Coffee Board’s estimates of 1.15 lakh tonnes. However for Robusta, the exporters’ crop projections are similar to that of the Board’s estimates. “The crop so far, looks good, unless you have major flooding in November due to the North East Monsoons,” he said.

In the first six months of the current financial year, coffee exports have registered a 6.5 per cent growth to 2.11 lakh tonnes, over same period last year’s 1.98 lakh tonnes. The shipments have grown 26 per cent to $593 million ($470 million in H1 last year), while the growth was higher in rupee terms at 33 per cent at ₹4645.75 crore (Rs 3474.08 crore).

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