evival in demand for instant coffees from key markets such as Russia and Europe is expected to boost coffee exports in the current fiscal to last year’s level of two lakh tonnes.
In the current fiscal till date, coffee exports are down 17 per cent in volumes and 37 per cent in dollar value.
Economic crisis
The economic crisis and a lower crop had impacted India’s coffee exports over the past year.
“Instant coffee exports are picking up. We have enough reasons to be optimistic that we will catch up and cover up the backlog in the last three months of the fiscal,” said Mr G.V. Krishna Rau, Chairman, Coffee Board.
Flat growth
Mr Rau said growth in exports would be flat with volumes close to two lakh tonnes. With the new crop set to arrive in December, exports are expected to gain further momentum.
Current performance
India’s coffee exports in fiscal 2008-09 stood at 1.97 lakh tonnes valued at $506 million or Rs 2,242 crore. In the current fiscal, till date, coffee exports stood at 85,186 tonnes valued at $176.72 million or Rs 904.02 crore.
New crop
“We still have over six months to go and we do not know how the rupee moves against dollar,” Mr Rau said, when asked whether the exports would be maintained in value terms. However, Mr Ramesh Rajah, President of All India Coffee Exporters Association, said the exporters’ order books were discouraging because of poor demand. Whatever is being exported is based on prior orders.
“With the new crop coming in December, we hope things would get better,” Mr Rajah added.
For the coffee year October-September 2009, exports volumes are down by a fifth to 1.75 lakh tonnes (2.20 lakh tonnes in the previous coffee year). In dollar terms, the exports in the current coffee year are down 33 per cent to $387 million ($570 million).
Commenting on the impact of the Free Trade Agreement that India signed with ASEAN, Mr Rau said it was likely to exert some pressure on the country’s coffee sector.
“There is some concern. We need to prepare ourselves to face those challenges. We have given some suggestions,” Mr Rau said.
Under the FTA pact that comes into effect next year, the import tariff on coffee and tea would be reduced from 100 per cent to 45 per cent over ten years.
Source : The Business Line