Slump pulls coffee exports down by 8% in FYO9

BANGALORE: India's coffee exports suffered an 8% fall in volume terms in 2008-09 although the performance in value terms fared a tad better. Coffee exports in 2008-09 stood at 2.04 lakh tonnes (provisional) against 2.22 lakh tonnes in FY2008, reflecting its second lowest performance in the last four years.

But, coffee exports has seen higher dollar earnings at $ 521 million in 2008-09 compared to $ 512 million in FY2007-08. A senior official with Bangalore-headquartered Coffee Board said lower offtake reflected a slowdown in demand from the developed world as a fallout of the global economic recession. ���Soluble (instant) coffee exports were hit as markets like Russia and Ukraine have been reeling under the impact of the global economic slowdown,��� the official said.

Incidentally, the January-March 2009 quarter saw exports fall to 55,811 tonnes against 70,162 tonnes indicating the impact of the slowdown. Although India produces both Arabicas and Robusta varieties, the production is heavily skewed towards the latter, which accounts for nearly two-thirds of the output.

In rupee terms, coffee exports have raked in Rs 2,291 crore in 2008-09 against Rs 2,074 crore during the last fiscal. ���Coffee prices saw a mild 10% to 12% uptick during the last fiscal and that has helped us to be afloat in this market,��� said Ramesh Rajah, President of All-India Coffee Exporters Association.

The average future prices for Arabicas in New York in 2008 were trading at 136.46 cents/lb against 121.83 cents/lb in 2007. Besides higher price realisation, the fact that the rupee had, in line with other global currencies, depreciated against the dollar in the last fiscal by 30% has also contributed its bit.

Despite gloomy prospects, Coffee Board sources said India could benefit as the domestic coffee crop is forecast to be good while global availability is expected to tighten on the back of a major fall in production.