New Delhi, Jun 27 (KNN) In a significant shift in the global coffee trade, Indian coffee exporters are experiencing a notable increase in demand from European buyers.

This surge is attributed to European companies building up their inventories ahead of the impending European Union Deforestation Regulation (EUDR) compliance deadline.

The EUDR, set to take effect on December 30, 2024, aims to minimise the importation of products linked to deforestation.

It mandates strict due diligence and traceability measures for various commodities, including coffee, potentially impacting Indian exports.

Ramesh Rajah, President, Coffee Exporters Association, stated, "We are witnessing a substantial front-loading of coffee orders as European customers prepare for the EUDR deadline. There's a noticeable build-up of inventories in Europe, with numerous shipments already in progress."

Data supports this trend, showing a 16 per cent increase in India's coffee shipments from January 1 to June 21, 2024, compared to the same period last year.

Total exports reached over 2.37 lakh tonnes, up from 2.04 lakh tonnes. Notably, re-exports grew by 18.3 per cent, while shipments of India-grown coffees increased by 15 per cent.

The EUDR has prompted a shift in buying patterns among European clients.

"Customers who previously preferred just-in-time purchases now feel it's safer to maintain inventory," Rajah explained.

He added that the traditional peak export season, typically February to May, has extended into June this year.

India, the world's seventh-largest coffee producer and fifth-largest exporter, sends more than two-thirds of its coffee overseas.

Europe accounts for about 60 per cent of Indian coffee exports, with Italy, Germany, and Belgium being major buyers.

Despite the increased demand, exporters face logistical challenges, including container shortages and rising freight rates, exacerbated by recent developments in the Red Sea region.

As the EUDR deadline approaches, this surge in European demand could significantly impact the global coffee trade, potentially reshaping supply chains and inventory management practices in the industry.

(KNN Bureau)