| Subject: |
Low global prices likely to lift coffee exporters’ hopes of reviving export |
|
KOCHI: The Indian coffee industry is expecting that new supplies and the downswing in global prices owing to widespread rains in Brazil, the largest producer, to lift exports which have been going through a slack phase.
According to Coffee Board figures, exports have shown a 5% drop from January to September this year to 2,35,796 tonne. A combination of tepid demand and higher prices has pulled down the shipments. Robusta cherry, which constitutes a major chunk of exports, has dropped by 19% during the period.
Indian robusta is traditionally priced higher in the global market thanks to its better quality. "Our exports suffered as the difference in prices of our robusta and that of Vietnam widened. Now it has narrowed down to $250 to $300 per tonne," said MP Devaiah, general manager of Allanasons, a major exporter.
Vietnam the largest producer of robusta coffee during the previous year, has been able to sell at a cheaper rate in the international market. Global coffee prices have cooled after showers in Brazil. Arabica futures on ICE New York are around $1.90 per pound. The rains may lead to another revision of the Brazilian crop estimate, which determines coffee prices worldwide.
According to the September report of International Coffee Organisation, the previous revision by Brazilian crop agency Conab put the production estimate at 45.14 million bags (each bag of 60 kg) for 2014-15.
Indian coffee prices have declined slightly. Raw coffee prices of arabica parchment have dropped 5% to below Rs 11,000 per 50 kg. Robusta cherry is down by 6% to Rs 3,500 per 50 kg.
"We expect global prices to slide another 10%. Though there is a carryover stock of around 20,000 tonne in India, overseas demand is for new crop slated to arrive by December. By that time, we hope the demand from western Europe also improves," said Ramesh Rajah, president of Coffee Exporters Association of India.
Growers are awaiting a poor arabica crop and a better robusta crop in the next season. "The situation hasn't changed. We estimate the arabica crop to be 30% less to be in the range of 60,000-65,000 tonne because of white stem borer attack. The robusta crop will be definitely better than the past year," said D Govindappa Jayaram, chairman of Karnataka Planters' Association.
The Coffee Board's post-blossom projections for 2014-15 are 1,05,00 tonne of arabica and 2.39 lakh tonne of robusta. Growers' estimate of robusta crop is 2.20 lakh tonne.
Source : economictimes.indiatimes.com
|