Coffee Exports Soar 45% In Q1 On Europe Demand.

India . coffee companies are on steroids as exports jump 45% in volume in the first quarter of the current year and double in value as international prices touched a 14-year high in May. However, the forthcoming quarters may see lower prices as harvest from top producer Brazil enters the market.

The bulk of India's coffee production is exported and companies focus much of their marketing effort on export promotion. Europe is the main destination for Indian coffee.

"Normally, most growers hold stock and try to sell in the second half of the year. But this time they were getting good offers every week right from the start of 2011," said Venkatakrishnan, senior general manager of NKG Jayanti Coffee, which had the largest share in exports for the first six months.

Coffee exports touched 1,19,130 tonne for the first quarter while a 42% rise in unit value to Rs 136 per kg saw export earnings zoom by 106% to Rs 1,631 crore for the three-month period ended June. In dollar terms, the value rose 117% to $364 million.

Despite the ongoing economic crisis in several countries, Europe continues to be the major buyer, with Italy accounting for the largest share followed by Germany . "There was a slight drop in exports to Greece. But exports to other European countries did not show a decline. Exports to West Asia showed a marginal spurt," said Ramesh Rajah, president of Coffee Exporters Association of India.

Higher volumes were aided by spiralling prices in the world market. Global prices more than doubled to touch $3 per pound. "Bulk of our export comprised the Robusta cherry variety for which Vietnam , Indonesia and Uganda are our main competitors. We could sell more because our rates were competitive during the period," Venkatakrishnan said.

Traditional coffee accounts for major part of the exports. Instant coffee and value-added export of imported coffee beans together comprise a smaller percentage of total exports. The latter is a cheaper variety and goes to mostly Russia and Eastern European countries. Arabica parchment commands premium prices.

Heavy shipments have depleted the stocks. "Not much coffee is left for exports now. The next crop expected by December will depend on the monsoon," said Murthy Krishnan, operat-ions manager of Allanasons Ltd.

The earlier declaration that the Duty Entitled Pass Book (DEPB) scheme, a popular refund sche-me for exporters, will be scra-pped compelled several exporters to send more consignments during the quarter. The announcement of extension to DEPB came midway during the period.

Global coffee prices have slid with Brazilian crop coming to the market. The prices have slumped to $2.63 to $2.67 per kg. Ramesh Rajah said the Brazil production is good and if the cold weather doesn't persist, prices could fall further by 10% to 15%.

Source : economictimes.indiatimes.com