Indian Coffee Exports to Wane Despite Huge Harvest.

India looks likely to give back its newly-found promotion in the coffee export league despite the prospect of a record harvest, having played a one-off card of running down inventories.

The country's coffee production will hit 5.2m bags in 2011-12, reflecting high prices which have encouraged farmers to splash out on fertilizers, besides decent rains which have improved growing conditions, the US Department of Agriculture office in New Delhi said.

The extent of monsoon rains actually caused floods in Karnataka, the top coffee growing state, and Kernala, another major producing area.

However, exports will slump by nearly one-quarter from last season's record levels, which were boosted by the sell-down of surprisingly large stocks into a strong market.

"While there are no reliable data on coffee stock levels, the volume of exports during 2010-11 suggests that stocks were likely higher than previously estimated," the USDA attaché, David Williams, said.

India vs Indonesia

Mr Williams estimated India's coffee exports last season at 5.56m bags, a rise of 29% year on year, and well above the official USDA estimate of 4.10m bags.

And the International Coffee Organization has pegged last season's figure even higher, at 6.01m bags, enough to lift India above Indonesia into fourth place in the coffee export league, behind Brazil, Vietnam and Colombia.

For 2011-12, a large pullback in Indian shipments would likely take the country back below Indonesia, whose exports dipped after too much rain and excessive heat depressed production.

That said, there are fears for Indonesia's forthcoming harvest too, after rains hit during the flowering stage.

Taste for tea

India's coffee export figure is above its harvest figure thanks to its coffee processing industry, which turns largely imported beans into soluble product.

Domestic consumption is relatively low, at 840,000 bags in 2010-11, according to Mr Williams.

This figure too is in dispute, with the ICO pegging consumption in India, largely a tea drinking country, at 1.73m bags.

Even so it would be only a little over half that in the UK, which has a considerably smaller population.

Source : agrimoney.com