Indian espresso exporters see marginal development in shipments for calendar 2021 even because the second Covid wave in Europe, their largest market, continues to weigh on demand.
“The second Covid wave, which has impacted out-of-home consumption in key markets reminiscent of Italy and the UK, amongst others, is hurting Indian espresso shipments,” stated Ramesh Rajah, President, Espresso Exporters’ Affiliation.
“The order place remains to be weak. Persons are not shopping for a lot ahead and are resorting hand-to-mouth. Usually, consumers take positions for six months, however now its need-based,” Rajah added.
To date, export volumes within the new yr have been partially higher, which Rajah stated was due largely to carry-over orders from the earlier yr. The general volumes have been up 4.4 per cent at 42,983 tonnes between January 1-February 19, over the identical interval final yr (41,159 tonnes). That is primarily on account of a rise in inexperienced bean shipments, which rose by about 24 per cent at 33,661 tonnes. Nonetheless, re-exports declined 34 per cent at 9,322 tonnes in the course of the interval, knocking down general development. In worth phrases, the Jan1-Feb 19 exports stood at $106.60 million, greater by about 11 per cent over the identical interval final yr.
Rajah stated the out-of-home or the cafe section in Europe, which has been badly hit by Covid containment, has hit shipments of premium Indian coffees, primarily the robusta parchment. Demand, nonetheless, was good for the cheaper robusta cherry coffees. Nonetheless, the Indian Arabicas, that are ruling a lot greater than these from Colombia and the Central American areas, haven’t seen a lot demand, Rajah added.
“The demand from Italy, the most important market, remains to be weak, whereas the offtake from Germany is healthier. What’s going to Italy was contracts deferred from final yr,” Rajah stated, including that exporters are focussed on retaining their current markets relatively than exploring new ones.
Rajah additional acknowledged that general exports in calendar 2021 must be marginally higher. “We could not attain the 2019 degree, however we might be higher than 2020.”
In calendar 2020, India’s espresso exports have been down by 12 per cent at 3.08 lakh tonnes, hit by the Covid lockdown. Italy, Germany and Belgium have been the highest three markets for Indian espresso exports in 2020, accounting for over a 3rd of the shipments.
In addition to muted demand, Indian exporters are additionally grappling with components reminiscent of a strengthening rupee in opposition to the greenback and rising freight charges amidst container shortages. “The strengthening rupee is hurting all people,” Rajah stated, including that the delay in launch of export incentive underneath MEIS/ RoDTEP is including to the confusion. The MEIS incentive of three per cent had not been launched since September final and exporters are factoring in the identical price whereas pricing their coffees.
The Espresso Board in its put up monsoon estimates had pegged the 2020-21 crop beginning October at 3.42 lakh tonnes as in comparison with 2.98 lakh tonnes within the earlier yr. The harvest of arabicas is nearly over, whereas growers are within the midst of choosing the robusta crop. The current unseasonal rains, coupled with hailstorms in components of North Kodagu, has interrupted the harvest, whereas delaying the method of drying coffees in different areas reminiscent of Hassan and Chikkamagaluru, growers stated.