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Indian coffee loses market share in Europe

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India’s coffee export declined by 17 per cent to 167,445 tonnes for the period from January 1 to June 23, 2020, compared with the same period in the previous year. Kochi: Indian coffee exporters may have lost their market share in Europe to Brazil, which has been able to push more quantities taking advantage of a larger crop and lower prices in the last few months.

India is the second top seller of coffee in Italy after Brazil. Germany, Belgium, Russia are also big buyers of Indian coffee. “But while liquidity problems and higher prices forced Indian exporters to go slow on shipments, Brazil has been continuing its exports since the Covid pandemic started. Devaluation of Brazilian currency also helped the exporters,’’ said Ramesh Rajah, president of Indian Coffee Exporters Association.

The harvest season in Brazil, the largest coffee producer, is currently on and the production is expected to be on the higher side. “With Covid problems in Europe, the buyers were looking for lower prices and Indian exporters, especially those in the small and medium category, were unable to meet their demand,’’ Rajah said.

Unlike in the previous years, there was no shortage of coffee beans for export. While the production of arabica variety was not up to expectations, availability of robusta beans, which account for the major share of Indian coffee crop, was good.

“Those who have not been able to sell their stock before the imposition of Covid lockdown in March could have been stuck with the lot with weak exports,’’ said Shirish Vijayendra, chairman of The Karnataka Planters’ Association.

The association has estimated a crop loss of Rs 441 crore from lockdown due to Covid in Karnataka, the largest coffee producer in the country. In addition, the association has calculated the loss from exports to be in the range of Rs 200 to 250 crore.

India’s coffee export declined by 17 per cent to 167,445 tonnes for the period from January 1 to June 23, 2020, compared with the same period in the previous year. The plunge has been severe in the case of robusta parchment beans at 26 per cent.

In Wayanad in Kerala, the key coffee producing region of the state, lower demand has kept the prices low. ” The prices are down by nearly 6 per cent from last year to Rs 3800 per bag of 54 kg. This is quite unremunerative for the growers,’’ said Prashant Rajesh, secretary of Wayanad Coffee Growers Association.

The coffee sector has demanded restoration of export incentive to 5 per cent from the present 3 per cent. While the growers have demanded financial assistance for crop loss and one-year moratorium on taxes and duties, the exporters have sought 20 per cent rise in working capital and 2 per cent interest subvention on loans to tide over the situation.

Source: indiatimes.com

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