Despite partial resumption in shipment of coffee to some European countries in the recent weeks after major disruption due to a coronavirus prompted national lockdown and a somewhat similar situation in importing markets, Indian coffee exporters are looking at a gloomy season with new orders not coming their way.
Speaking with indoasiancommodities.com, Ramesh Rajah, President, Coffee Exporters Association, said the signs were not positive for the coming season with many countries asking for further postponement of shipment of contracted orders.
“Though coffee exports has slowly resumed, what is being shipped right now are the consignments for the pending orders. The problem is we are not receiving new bulk orders,” he said.
“There are some small positive signals from Europe including Italy which is our major market, but countries in West Asia, America and other Asian countries are not showing much interest in signing new contracts. Many countries, in fact, have asked us to delay the shipment,” he said.
Indian coffee production, averaging slightly over 300,000 tonnes annually, is export centric with as much as 70 percent of the domestic produce shipped globally. The major markets of Indian coffee internationally are Italy, Germany, the UK and Russian Federation in Europe and Jordan and Turkey in West Asia.
Data posted on Coffee Board’s website clearly points to a major declining trend this year – between January to mid-May, permit was issued for exports of 126,060 tonnes against permits for 157,716 tonnes in the corresponding period last year. March to June is considered to be the peak supply season for the Indian coffee internationally.
The Indian coffee exporters are further apprehensive of falling prices and the arrival of Brazilian coffee in the international market in bulk from June which will put further pressure on them.
“The global dip in demand, especially because of closure of restaurants and hotels in major coffee consuming nations in Europe, has brought down prices. And in such a situation, we are likely to face more pressure from the next month with the Brazilian coffee arriving in the international market as the harvesting season begins there,” Rajah said.
The price of Robusta variety, major strength of India’s coffee exports basket, is estimated to have slipped to $1,400 tonne in the international market now as against $1800 tonne a year ago.
“There are too many odds against us at this stage. By June end, we will have a sense of how Indian coffee export segment will fare in the near run,” Rajah said.