Easing the Pressure on Indian Coffee Exporters

The European Commission’s decision to delay the implementation of the EU Deforestation Regulation (EUDR) has given Indian coffee exporters some much-needed breathing room. The EUDR aims to curb imports of products from deforested areas. It requires companies exporting commodities like coffee, cocoa, rubber, and others to the EU to conduct thorough deforestation checks. This includes risk assessments and mitigation to ensure products are not sourced from deforested areas after December 31, 2020.

The new EUDR regulations will take effect on January 1, 2025, instead of 2024. This delay will give exporters more time to comply with strict environmental and social standards, which emphasize sustainability.

Coffee Exporters Relieved by Deadline Extension

Several countries, including India, the US, Brazil, and Indonesia, raised concerns about the tight deadlines for implementing the EUDR. On Wednesday, the European Commission agreed to delay the regulation by a year. “This extra time will give us the chance to prepare,” said Ramesh Rajah, President of the Coffee Exporters Association. “We really needed that break.”

Europe remains the top destination for Indian coffee exports. The upcoming EUDR deadline had left the Indian coffee industry feeling stressed, with many companies struggling to comply with the complex regulations. “With the extra year, we now have more clarity and time to get ready,” Rajah explained.

Stockpiling Before the Original Deadline

Before the EUDR extension, European importers rushed to stock up on Indian coffee. This led to a surge in buying as they prepared for the regulation’s original December 30 deadline. In the past six months, Indian coffee shipment volumes rose by about 15%, driven mainly by European demand. “Most of the panic buying has already happened,” Rajah noted. “We’re seeing inventory build up in both the EU and the US.”

Strong Growth in India’s Coffee Exports

India’s coffee exports saw significant growth in the first half of this financial year.

• Export value jumped 55% to $929.95 million, compared to $601.58 million a year ago, driven by higher global coffee prices.
• In terms of volume, exports rose 15% to 2.2 lakh tonnes from 1.91 lakh tonnes last year.

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