Crop year October 2008 to September 2009 has been one of the worst for the Indian coffee. The country, which exports more than 75 per cent of its coffee output witnessed a sharp decline of over 20 per cent in exports owing to poor demand in consuming countries following the global slowdown. In addition, the domestic coffee production was hit due to erratic rainfall. Prices were up on supply crunch further affecting consumption.
According to data released by the Coffee Board, for the crop year ending September 30, 2009, India’s coffee exports stood at 1,81,069 tonnes as against 2,27,779 tonnes in the previous year, a decline of 20.5 per cent.
Export earnings were Rs 1,978 crore for the year, down over 17 per cent compared with the previous year. Unit value remained flat at around Rs 1 lakh per tonne.
Exports have fallen not only in India but also in Columbia and Guatemala, according to the International Coffee Organisation (ICO). According to the latest data released by the ICO for the Oct 2008 - Aug 2009 period, shipments were down 22 per cent and 9.5 per cent respectively in Columbia and Guatemala. However, global shipments rose marginally by 3.49 per cent at 98.6 million bags (1 bag is 60 kg).
Demand from the Russian Federation and European countries came down considerably due to economic meltdown. Output in India was hit due to heavy crop loss in the biggest-producing state of Karnataka following untimely and excessive rains and berry-bores menace. Total output in the country for the crop year has been estimated at 262,300 tonnes, which is 10 per cent less than initial estimates done by the Coffee Board.
Even Brazil’s crop at 39.1 million bags (1 bag is 60 kg) is 11 per cent lower than expected. Lower coffee stocks have triggered prices. Indian coffee is fetching around $1.3 per pound, one of the highest in recent months.
However exporters opine that high prices are only a temporary phenomenon. Brazil is expecting a bumper crop in 2010. And even India has pegged output at a higher level at 306,300 tonnes - arabica 101,525 tonnes and robusta 204,755 tonnes, which will arrive in the market in January 2010.
Source : Business Standard