India’s coffee exports, hit by a reduced global demand owing to the economic meltdown, have dropped 20 per cent during January-June 2009. Exports during this period stood at 103,621 tonnes as against 130,506 tonnes in the corresponding period of the previous financial year.
Moreover, exporters do not see any improvement in shipments in the coming 2-3 months. They expect the current coffee year (October 2008 - September 2009) to conclude with exports in the range of 180,000-190,000 tonnes, which would be 14-18 per cent lower compared with the previous coffee year. With this coffee exports would be at a 10-year low, according to Ramesh Raja, president, Coffee Exporters Association of India.
While exports are still reeling under the impact of global recession, low coffee output in India has also led to low export volumes.
There was a heavy crop loss in the biggest producing state of Karnataka due to excessive rains last year and berry borer problem. It is estimated by the Coffee Board that by the end of the current coffee year, India’s total coffee output would be 262,300 tonnes, which is 10 per cent lower than the initial estimates. Normally, India exports about 75 per cent of the coffee produced.
This year, demand for Indian coffee has been poor in Europe and Russian countries. Though, exporters are hopeful of the next coffee year, which begins this October, as output forecast for the year, pegged at 306,300 tonnes, looks promising. There has been no excessive rain so far and it is expected that harvesting will be fully completed. Timely advisories have been issued to growers to tackle berry borer problem, said a senior official at the Coffee Board.
For the new season, the coffee board puts Karnataka’s output 20 per cent higher at 221,475 tonnes, of which robusta constitutes 141,755 tonnes and arabica 79,720 tonnes.
Brazil, the biggest coffee-growing country in the world is also expected to see a bumper crop next year. This would mean a situation where supply exceeds demand and hence international prices may fall sharply.
“In India, there is a sustained demand, so prices may not fall dramatically. However, international prices may see a sharp decline. Hence, for exporters, the year will be marked by high volumes and low prices,” Raja noted.
Source : Business Standard