Coffee exports likely to fall by 20%

BANGALORE: The country’s coffee exports are likely to decline by 20% in the current coffee year (October 2007 to September 2008) due to a slew of reasons, including a robust rupee, the Coffee Exporters’ Association said on Wednesday. “We see a drop of 20% in coffee exports during 2007-08 coffee year that ends in September. Exports would witness a dent due to the appreciation of rupee and fall in the domestic production,” the association’s president Ramesh Rajah said.

Exports in the first four months of coffee year (October-January) have already fallen by 7.79% at 59,443 tonne against 64,467 tonne in the same period last year. “A stronger rupee is turning to be a bane to growers as they are getting 10% less for their produce in the market.

As a result, they are holding their stocks,” Mr Rajah added. Besides, the Coffee Board has lowered its crop forecast for the current year to 2,62,000 tonne from an earlier estimate of 2,91,000 tonne, he said. According to Mr Rajah, coffee production may come down to even below the government’s target of 2,60,000 tonne because the crop has been affected by the unusual heavy rains during last August.

The Russian ban on India’s imports may also have some impact on coffee exports, especially instant coffee.
The ban may upset the market, he added. India produces only 4.5% of the world’s coffee, but exports 70-80% of its production.