Financial Daily from THE HINDU group of publications
Friday, May 26, 2006
Financial Daily from THE HINDU group of publications Friday, May 26, 2006 |
|
|
|
|
|
|
|
Agri-Biz & Commodities
-
Coffee Industry & Economy - Exports & Imports World coffee output, exports decline G.K. Nair
Kochi , May 25 World coffee production in 2005-06 was down 5.5 lakh tonnes to 67.95 lakh tonne from the previous year and as a result, exports from the producing countries dropped by 6.23 lakh tonnes to 49.44 lakh tonnes. The huge surplus has been reduced world over leading to an increase in the prices during the year, Mr Anil Kumar Bhandari, former President, Upasi told Business Line. The current price is remunerative but to wipe out the losses inflicted by the low prices in the previous years, the prices should have to sustain at the current levels for 2-3 years, he said.
debts
The total debts of the coffee sector is estimated at somewhere between Rs 1,500 crore to Rs 1,800 crore. The prices should remain at 115-125 cents/lb at least for two to three years, he said. There is no equilibrium in the demand and supply position at present as there is still a surplus albeit comparatively small. "There is little coffee left at origin, especially in Brazil, which will not remain without an impact on future exports," said a report. A senior official of the International Coffee Organisation (ICO) was quoted as saying that stocks at origins fell by 16.94 per cent in 2004-05 and had fallen further in 2005-06, even with the reduced export flow. Carryover stocks from Brazil are reported to have declined to nine million 60-kg bags by the end of March 2006, the lowest since 1957.
The situation might change slightly in 2006-07 if the reported increase of 13 per cent in world output is translated into reality.
Already, the production in Brazil has been reportedly projected at 44 million bags by the US Department of Agriculture even though the Brazilian industry has projected it as 40 million bags. In 2005-06 the output in Brazil was 36.10 million bags of 60 Kg each as against 43.6 million bags the previous year. Harvesting of the new crop is to commence in Brazil in June and would last till August-end, he said.
According to him, the increase in production is not at a higher rate now. However, still it is above the rate of growth in consumption. But, the reduction in the rate of increase in output coupled with the liquidation of much of the huge surplus held in recent years might help the prices to remain at moderate levels, he said.
Untapped markets
The potential markets for coffee yet to be tapped were India and China, he said. According to him, as against the per capita consumption of 9 kg in Finland and 4.8 kg in Brazil, the Indian per capita consumption is a meagre 65-gm. If the per capita consumption in India were raised to even one kg, that would absorb a substantial quantity of the production in the country, he said.
The low domestic consumption, estimated at around 25 per cent of the total production which was 2,81,900 tonnes in 2005-06, has forced this sector to depend heavily on the export market, he said. In 2005-06 the country exported 2,06,000 tonnes of coffee as against 2,04,000 tonnes the previous year.
More Stories on : Coffee | Exports & Imports
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|