Kochi, May 10 Indian coffee exports continued to decline during the first four months of the current year mainly due to the financial crunch overseas, even as the world coffee exports showed an increase in the 2008-09 coffee year.
Indian shipments from January 1 to May 6 stood at 74,624 tonnes against 91,241 tonnes in the corresponding period last year registering a fall of 16,617 tonnes. The drop in instant coffee exports was 6,411 tonnes, while the rest was in other categories, according to the India Coffee Board sources.
“Consequent to the economic recession our exports to Japan have declined. Japan used to buy Indian premium coffee but now it has cut down its imports,” Mr Shaji Philip, UPASI Coffee Committee Chairman, told Business Line. He said that similarly, the Eastern European countries have been the major buyers of our instant coffee, now they have also effected a drop in their imports.
Arabica output hit
Coupled with the economic slowdown the sharp decline in the Indian coffee production, which is significant in the case of Arabica coffee, could also be a reason for the decline in Indian exports, Mr Philip said. “Unseasonal rains last year has brought down the output sharply during the current season,” he added.
According to him, in India, Arabica price is much higher because of short supply. Indian output of Arabica, he said, could be somewhere near 70,000 tonnes, while that of Robusta around 1,80,000 tonnes. Thus, the total output might be around 2,50,000 tonnes, he added.
Meanwhile, an industry source said there has not been any fall in consumption overseas because of the slowdown. But, there has been a decline in purchases by companies which do not keep huge inventories now and instead cover only what is needed, they said.
The total exports during the current season were also up at 2.78 million bags against 2.72 million bags in the previous season.
Drop in next crop
However, in 2009-10, the exports might remain at the previous levels. There is said to be a drop in the next crop, like in the case of some other major producers in the world such as Brazil, Columbia, they said.
International Coffee Organisation (ICO) said world coffee exports amounted to 9.33 million bags in March 2009, compared with 8.87 million bags in March 2008.
Exports in the first six months of the coffee year 2008-09 (October 8 to March 9) have increased by 4.9 per cent to 48.9 million bags compared with 46.6 million bags in the corresponding period in the last coffee year. In the 12 months ending March 2009, exports of Arabica totalled 63.4 million bags compared with 62.5 million bags last year; whereas Robusta exports amounted to 34.5 million bags compared with 33.3 million bags.
Global factors
According to the India Coffee Board sources, depleted stocks of Colombian mild washed arabicas continue to provide support for futures prices in the ICE. In addition, delayed harvests out of Central America and a smaller 2009-10 crop from Brazil contribute to the bullish tone.
Source : Business Line