Coffee output estimate lowered

Coffee output in the country, Asia's third-biggest exporter, may fall 10 per cent this year from a July estimate because of damage from heavy rainfall and pests.

Production may reach 262,000 tonnes in the year ending September 2008, lower than the 291,000 tonnes forecast in July by the government, the state-run Coffee Board said on Wednesday on its website. The total output last year was 288,000 tonnes.

The forecast for a smaller crop comes at a time when the International Coffee Organisation expects this year's global demand to exceed last month's forecast. Lower output may cut exports from India, Thus fuelling prices of robusta beans, which have risen 17 per cent in London since January.

Some plantations in Hassan and Chikmagalur areas in Karnataka, the country's biggest coffee-growing region, got as much as 20 inches of rain in July, 35 per cent above average for the month. The state may gather 191,575 tonnes, less than the 212,250 estimated in July, the board said.

The country's coffee output will comprise 169,500 tonnes of robusta beans and 92,500 tonnes of the arabica variety, the board said. That's less than the 190,250 tonnes robusta production estimated in July. Robusta usually make up 70 per cent of the total harvest.

A fall in output may cause exports to decline more than 18 per cent in 2008, Ramesh Rajah, president of the Coffee Exporters Association of India, said in an interview from Bangalore on Wednesday. Overseas sales may total 180,000 tonnes, compared with an estimated 220,000 tonnes this year, he said.

The rupee has gained 12.5 against the dollar this year, making Indian robusta coffee $50 a tonne more expensive than from suppliers in Vietnam and Indonesia, Rajah said.

"Exports this year is down already because of the gain in rupee and a lower output will compound our problems,'' he said. "Domestic prices will rise further on the forecast of a smaller crop, making export rates uncompetitive.''

The country exports more than two-thirds of its output to countries including Italy and Russia. Nestle India, Tata Coffee, Allana Sons and General Commodities were the biggest exporters this year. The country exported 214,413 tonnes in between January 1 and December 13, according to provisional data from the board.

GONE WITH THE RAINS

Production may reach 262,000 tonnes in the year ending September 2008, lower than the 291,000 tonnes forecast in July

Karnataka may gather 191,575 tonnes, less than the 212,250 estimated in July

Total output last year stood at 288,000 tonnes

Exports to decline by more than 18 per cent in 2008