India’s Arabica coffee exports stay flat as European buyers prefer cheaper variety

India’s Arabica coffee exports are off to a slow start in the current calendar year as growers hold back their produce anticipating better prices, while buyers of arabica in Europe — mainly the roasters from Germany — are seen shifting to the less expensive Central American variety.

However, the robusta market for Indian exporters in Italy is remained intact.

The European buyers,Germany, are not keen to pay what Indian Coffee growers are demanding,due to this mismatch in price expectations markets gained by Indian coffee over the past few years in North and Central Europe  have been surrened to cheaper variety coffe from Central American producers such as Honduras and Colombia said
Ramesh Rajah, President of Coffee Exporters Association,

Indian arabica presently commands a premium of about 15-20 cents over the New York terminal prices. Farm gate prices of arabicas range between ₹9,300 and ₹9,700 per 50-kg bag.

Reports also shows dip in permits issued for arabica shipments by Coffee Board are down by 46 per cent in the January 1-February 8 period over the year-ago period.
Growers, who believe there’s a global deficit in coffee this year, are seen holding back their produce. The harvest of arabica’s is expected to be complete in a couple of weeks, while the picking of robusta’s has commenced in the key producing regions of Chikmagalur and Kodagu.

Trade sources said the shift in preference of buyers to other origins was not a new phenomenon and that it occurs every two to three years.
“It does not mean that our coffees remain unsold. Though the order books are thin this year, Indian coffees get easily absorbed in the world market considering that there is a global deficit,”
Trade sources estimate that about 25-30 per cent of the arabica crop and about a fifth of the robustas, currently being harvested, have already been traded.

Source: The Hindu BusinessLine