Coffee Board expects 10% dip in export volumes this fiscal.

BANGALORE: Coffee Board anticipates there could be a 10% fall in the volume of coffee exports for the current financial year, as compared to the prev ious year’s 218,996 tonnes. Coffee Board chairman GV Krishna Rau told ET that this 10% fall in volume was anticipated due to a combination of factors, with performance in the last quarter likely to be affected.

Last quarter exports largely came from the new crop, with harvesting of Arabica beans beginning in November-December and that of Robusta in February-March. However, due to heavy monsoon rains in August and unseasonal showers towards the end of October, a fair portion of the coffee crop had been damaged.

Apart from India’s next coffee crop now being projected at 10% less than the earlier estimate of 293,000 tonnes, export performance in the last quarter was also likely to be affected by the global financial crisis and its downward impact on world coffee prices, as a result of which buyers from India’s main market of Europe had not shown much interest in firming up contracts for the new crop, Mr Rau added.

Owing to the large crops from Brazil and Vietnam as well as movement of funds away from coffee futures, the general expectation was that prices might not move up significantly from the present level and that growers might not be very enthusiastic to sell, what with Arabica prices dropping by 15% over the last month and Robusta prices by 27%.

However, in terms of value, Mr Rau expected the targets for 2008-09 to be met due to a comination of factors like re-export of instant coffees, with the beans being sourced from other countries and processed in India.

Mr Rau also anticipated that since 70% of India’s coffee crop was cultivated by small growers who did not have the holding capacity, some coffee would come into the market.

Source : The Economic Times