Coffee Traders Race Against Time to Avoid Strict European Legislation Threatening Supply

Europe is witnessing a frantic surge in coffee shipments as traders scramble to stockpile vast quantities of beans before new environmental regulations take effect at the end of this year.

The new European Union Deforestation Regulation (EUDR) will require importers to prove that their products, such as coffee, do not contribute to deforestation. With the implementation details still unclear, companies are facing significant risks of supply chain disruptions.

Coffee crops, which millions of small-scale farmers around the world rely on, are under immense pressure to comply with the new rules. As a result, traders are rushing to ship as much coffee as possible to Europe before December 30 to avoid falling under the purview of this law.

Brazil, the world’s largest coffee producer, has seen its exports to the European Union soar by a staggering 65% in the seven months leading up to July compared to the same period last year. Uganda, which is becoming increasingly important in supplying Europe with Robusta coffee, also recorded a historic high in exports last month, with the majority headed to Europe.

“The Last Harvest Before the Clampdown” Ted Marley, a coffee trader in Uganda, confirmed, “This is the last harvest we can ship before Europe closes its doors to uncertified beans,” noting that “the next Robusta harvest will arrive in October, and given the long shipping and processing times, it will be crucial that all upcoming shipments fully comply with the new law.”

In this context, Ricardo dos Santos, Managing Director of European coffee supplier Riccoffee, stated that roasters are working to cover any potential shortages in the first quarter of 2025. He added that traders are becoming more cautious, with only a few daring to ship beans after October to avoid missing the opportunity to ship uncertified beans.

Under these pressures, the market is seeing sharp price increases. Robusta prices, used in instant coffee, have soared to levels not seen since the 1970s, while high-quality Arabica beans have risen by more than 30% this year. The situation is further complicated by rising borrowing costs, container shortages, and longer transportation times.

Uncertain Future and Upcoming Challenges Holger Prebisch, CEO of the German Coffee Association, stated, “We lack the financial resources and space to store a year’s worth of reserves in Europe.” He added that despite the frantic efforts to stockpile as much as possible before the new law is enforced, the future remains uncertain, as the European Commission has yet to release all the implementation details, which could lead to reduced supplies and higher prices.

China May Gain In a telling comment, Job Kankiruh, a coffee broker at Wakanda Coffee Brokerage Services in Uganda, pointed out that “Uganda is lagging in complying with the EU law, as sustainability was not a priority for many exporters until this law became an inescapable reality.”

Despite the pressure on the European Union to reconsider these regulations, shipments are expected to slow significantly, as no one wants to bear the cost of shipments that might be rejected later for non-compliance.

However, what could be a loss for Europe might become a gain for China. Kankiruh explained, “We have noticed increased interest from Chinese buyers, and it seems the time has come to explore alternative markets, even though the European Union used to account for about 90% of our exports.”