India expected the $962-billion loan package unveiled by European nations to reverse a recent slide in coffee orders from the region, which buys more than 75 per cent of the nation’s output, an exporters’ group said.
“We really hope the loan package solves the problem the buyers in Europe were facing,” Ramesh Rajah, president of the Coffee Exporters’ Association of India, said. “We were very worried,” he added.
A rebound in European orders may help India, Asia’s third-biggest shipper after Vietnam and Indonesia, to sustain a 37 per cent gain in exports in the year that began on October 1. Orders dropped in recent weeks, as the euro slumped to a 14-month low against the dollar.
Buyers from Greece and Spain were seeking lower quantities than normal, or asking sellers to cut prices in recent weeks, Rajah said. Italy, Germany and Spain were among the biggest buyers of green coffee from India, accounting for about 80 per cent of the nation’s annual shipments, he added.
“The slowdown seems to be deeper than most people thought initially, and we only hope the package leads to a sustained recovery in Europe and not a relapse into recession,” he said.