Recessions in Europe, and the US would weigh on Indian coffee export prices
Prices for Indian coffee would be hurt by recessions in Europe and the US, but exports are expected to stay stable in the coming year. Europe and the U.S. are two of the most important markets for Indian coffee.
About two-thirds of the beans grown in the country are shipped to these two places. Orders are now light, but exporters expect them to increase once Indian prices catch up with international rates.
‘I believe the volumes will be adequate. We should be able to export at the same rate as the previous year. While there was an increase in re-exported coffees last year, we believe green bean exports will be excellent this year as well because the crop looks good. However, prices will be reduced due to the recession in Europe and the United States. ‘Despite decreased pricing, we believe shipments will take place,’ said Ramesh Rajah, President of the Coffee Exporters Association.
Related Agri News | Sharp drop in production, price of Robusta coffee reached an all-time high
Count on instant coffee
India’s coffee exports for calendar 2022 surpassed 4 lakh tonnes and reached a new high of $1.11 billion due to better realizations, representing an 18% rise in value.
‘We should reach over 4 lakh tonnes this year too, but it all hinges on the instant coffee exports.’We don’t know what effect the recession will have on them,’ Rajah remarked.
The harvest of gentler arabica varieties is nearly complete, while the robusta harvest has begun in key producing areas of Karnataka and Kerala.
‘Right now, producers are cautious about selling because prices have fallen slightly in the last two months. The growers are resisting the urge to sell. ‘However, we believe that once the robusta type becomes widely available on the market, exports will increase,’ Rajah said.
‘Orders are still slow, but we believe they will pick up. The order book is thin in comparison to past years. Right now, Indian prices are slightly higher than international parity, and purchasers are hesitant to place orders. We believe that once the arrivals begin, Indian prices will fall and become more in line with foreign rates. If Indian prices catch up to international prices, the order book would improve,’ Rajah said.
Jeffry Rebello, president of the United Planters’ Association of Southern India (UPASI), said that harvesting had moved forward because the weather had been better in the last two weeks. ‘We are currently examining the crop size, but it is too early to determine. Robusta appears good in some regions and ordinary in others. ‘Arabica is going to be down by 10-15%,’ he said.
Related Agri News | Karnataka Coffee farmers worried over 15% loss of their crops to heavy rain
Bose Mandanna, a grower in Kodagu, says that the district’s robusta crop looks terrible and is expected to be about 30% smaller than usual because it rained during the blooming time and made it hard to set up the crops. The rains had a negative impact on the arabica harvest.
‘It is a difficult time for producers, as pepper is also not excellent and costs are rising while prices are decreasing. We’ve heard that due to the recession in Europe and the United States, export orders are scarce. ‘We will have to seek out new areas, such as Australia, South Korea, and the Middle East, in order to expand demand,’ he said.