Vishwanath Kulkarni

Bangalore, Aug 4

COFFEE exports are likely to decline to a 10-year low this calendar year as growers and traders hold back stocks in anticipation of better prices, according to Mr Ramesh Rajah, President of Coffee Exporters Association of India.

In the first seven months, coffee exports have declined by 38 per cent to 1.01 lakh tonnes compared with 1.64 lakh tonnes during the same period a year ago. Permits issued by the Coffee Board till August 3, are also down at 1.186 lakh tonnes compared with 1.669 lakh tonnes last year.

"Non-availability of coffee in the market has forced exporters not to book orders," Mr Rajah said, adding that this could lead to exports ending up at a 10-year low.

Coffee exports totalled two lakh tonnes 10 years ago, Mr Rajah said. The highest export was 2.4 lakh tonnes two years ago.

However, the Coffee Board Chairman, Mr G.V.Krishna Rau, said the holding back of stocks was unlikely to have any serious impact on the exports as a whole.

"At the best they will be delayed by a few months. But since the growers cannot hold the stocks indefinitely, the volumes will be achieved in the coming months," Mr Rau said.

"Due to the volatility seen in the prices, we may see some coffee coming into the markets in the next few months," Mr Rajah said. "However, the quality of grades like arabicas could be affected as it has been raining for the last few weeks in the main growing areas. If the quality is affected the coffees may get discounted," he added.

Moreover, Mr Rajah said the crop size of November 2004 - October 2005 could be lower at 2.6 lakh tonnes as against the projected 2.7-2.8 lakh tonnes.

Though the export volumes have seen a drop, the value of exports is on an upswing. The unit value of coffee exported has shot up to Rs 70,425 a tonne compared with Rs 50,244 in the previous year. The value of exports till date in current calendar stood at Rs 712.71 crore compared with Rs 826.46 crore.

(This article was published in the Business Line print edition dated August 5, 2005)
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