Covid impact: Coffee shipments down 12% in 2020

India’s coffee exports for the calendar 2020 shrunk by close to 12 per cent at…

India’s coffee exports for the calendar 2020 shrunk by close to 12 per cent at 3.08 lakh tonnes (lt) over previous year on decline in demand from key markets such as Italy and Germany due to the Covid lockdown and also due to limited availability of beans for shipments.

In value terms, the shipments fell by 9.46 per cent at $714 million ($789 million in 2019), while the decline in local currency was 4.5 per cent at ₹5,298 crore (₹5,549 crore).

Unit value rises

However, the per unit realisation fetched by the Indian exporters was up by around 8 per cent on account on improvement in prices towards the end of the year and also due to the weakening of rupee against the dollar.

“The decline in volumes was broadly on expected lines,” said Ramesh Rajah, President of the Coffee Exporters Association.

Prospects hit

Near-term outlook for the first quarter of 2021 looks hazy as exporters are concerned over the spread of second wave of Covid in Europe, the main market.

“We are hoping think that the current lockdown will impact only the first quarter and that things will get back to normal from the second quarter of the year. If that happens, we should recover this 10 per cent drop,” Rajah said.

 

Thin orders

As of now, the order books of exporters are down by almost a third over the previous year.

“We delayed taking order this year. Normally, we start taking orders from September, but this year order booking started in December. Moreover, the crop has been delayed by about 3-4 weeks.

Also, improved availability of the beans due to higher 2020-21 crop should support the shipments, but exporters are facing difficulty in pricing their coffees due to the uncertainty on the RoDTEP rates, Rajah said.

Italy, Germany and Belgium were the top three markets for Indian coffee exports accounting for over a third of the shipments.

According to the Coffee Board’s post monsoon estimates, the 2020-21 crop starting September is seen higher at 3.42 lt (2.98 lt).