The Hindu Business Line : Coffee exports taper off on low stocks

"Coffee exports are expected to be slow till the arrival of new crop in December. Also, exports were higher in the first half and therefore, not much is available," a Bangalore-based exporter said.

According to trade sources, very few people have stocks to offer to exporters. "Even that is being quoted higher and exporters cannot afford to pay that much," they said.

A grower-exporter said: "It is natural for any grower to seek higher price when there is demand and stocks are low."

According to official figures, permits have been issued to export 1.76 lakh tonnes (lt) of coffee from January to August 23. During the same time last year, permits were issued to ship 1.60 lt. Of the permits issued, exporters had sent consignments to the tune of 1.60 lt against 1.56 lt a year ago.

"We have to take into account the fact that the crop this year is lower than last year. Still, exports are up and it is a reason why the stocks are low or no coffee is available with some," trade sources said.

This year (October 2003-September 2004) coffee production has been projected at 2.75 lt, a little over 3 lt in the previous year. This year, the crop has been affected due to dry weather, stem borer attack and poor farm management by growers. For the next year, the production has been estimated at 2.92 lt.

Though the season begins in October, arrivals begin towards the first week of December. Nearly two-thirds of the coffee produced in the country is exported.

The grower-exporter said: "Prices are higher for robusta parchment and plantation A, while for peaberry it is higher."

"Domestic buyers can afford to buy, for example, plantation A at Rs 72 a kg because they can sell it at Rs 100 in retail market. Exporters cannot afford to pay so much because they would have booked orders at a lower rate," he said.

"A huller now quotes Rs 900 for a 50-kg bag of peaberry, whereas the global price for it is around Rs 700. At the most, the exporter can afford Rs 800," trade sources said.

Official sources, when contacted, said availability was a problem due to lower production this year.

"The demand-supply situation is playing a big role currently. World over, demand is up since Brazil crop has been projected to be lower," another exporter said.

Meanwhile, the strengthening of the rupee since last year and rise in fuel prices have left the exporters worried.

"Though the rupee has declined somewhat against the dollar, it is still higher than the 47 mark a year ago. And fuel prices are causes for worry since we have to transport coffee from the farmgate to the curers and then, to the ports," exporters said.

Exporters who send their shipments to Kochi port have also been affected since the Railways is not allowing movement of container since a bridge is weak. "This has forced us to move containers by road, which is 1.5 times costlier than moving by rail," exporters said.

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