Coffee is the world’s second-most traded commodity and in India also coffee industry is one of the country’s main economic sources. All kind of industries is facing a decline due to the COVID19 pandemic. And with the continuous spread of the virus in the world, the coffee industry is also set to take a risk.
In India, Karnataka is the largest producer of coffee. It has been estimated that a crop loss of Rs 441crore happened from lockdown. Moreover, India ‘s coffee export declined by 17% as compared to the previous year. Indian coffee exported may have lost its market share in Europe to Brazil.
Italy is one of the top export destinations for India ‘s coffee production. The export of coffee to Italy has dropped as it has been on lockdown. And it is the worst scenario for the coffee industry, as many employees are facing the loss of jobs.
In India, coffee producers and makers are unable to export their items. They are unable to cope with the cost of production, which shows that some of them may have to lay off their work. Because with COVID problems the buyers are looking for lower prices and Indian exporters especially in the category of small and medium are unable to fulfill their demand.
The availability of shipping containers is also the limitation that coffee exporters are facing. There is a shortage of containers and shipping availability. In general, India produces over 3lakhs tonnes of coffee annually and Kerala itself accounts for 65000 tonnes. If the situation remains the same and coffee exporters continuously face difficulties in exporting, then coffee farmers will face a huge financial crisis in the future.
The export incentive to 5% from 3% is demanded by the coffee sector. One year moratorium on taxes and financial assistance for crop loss is also demanded by the growers as a solution.