The European Union's proposed Deforestation Regulation (EUDR) has sparked a surge in demand for Indian coffee, as European buyers scramble to build inventory ahead of the December 30 compliance deadline. The regulation, aimed at minimizing the importation of products linked to deforestation, requires strict due diligence and traceability measures for commodities like coffee, and is expected to have a significant impact on Indian exports. As a result, Indian coffee exporters are witnessing a 16% increase in shipments, with European customers opting to stockpile coffee ahead of the deadline. This "front-loading" of coffee is a departure from the traditional just-in-time approach, as roasters prioritize safety over supply-chain management. While the increased demand is a boon for Indian coffee exporters, they still face challenges related to logistics, including container availability and freight rate hikes following recent developments in the Red Sea region.
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