Unit value of coffee exports falling steadily

The International Coffee Organisation (ICO) has said the unit value of exports has been declining steadily for a number of coffee producing countries including India.

Nestor Osorio, executive director, ICO, in his monthly coffee market report said, "On the basis of the 2003 index, the unit value of exports declined steadily for a number of countries. More specifically, the unit value index fell in Brazil by 35.7 per cent, Colombia 27.5 per cent, Uganda 12.6 per cent, India 10.4 per cent and Guatemala 3.3 per cent."

"Notwithstanding the firmness of prices, the weakness of the US dollar has meant a reduction in the export earnings of many countries," he added. 
 

WEAK BREW Impact of the weakening $ on exports revenue
(Index base: 2003=100)	2003	2004	2005	2006	2007
Unit value in cents/lb	42.53	48.15	74.66	78.26	90.03
Index unit value	100	113.21	175.55	184.01	211.69
Unit value in Rs	1981	2182	3293	3549	3757
Index value in Rs	100	110.14	166.2	179.13	189.63
Rs/$	46.58	45.32	44.1	45.34	41.73
Rs/$ index	100	97.29	94.68	97.34	89.59

The ICO has also revised world coffee production from 114 million bags to 116 million bags and has expressed concern over weakness of the US dollar.

Coffee exports in November 2007 were seven million bags, bringing total exports for the first 11 months of 2007 to 87.4 million bags, an increase of 4.4 per cent compared to the same period in 2006.

As for the prices, they rose sharply in December 2007, particularly in the Arabica variety, with the monthly average of the ICO composite price standing at 118.16 cents a pound compared with 114.43 cents a pound in November 2007.

While Robusta prices were slightly down in December, they remained firm and broke the $1 barrier on January 11, 2008, for the first time in nearly 12 years.

The price of 100.35 cents for Robustas on January 11 is over 363 per cent higher than the price of 21.65 cents on October 11, 2001.

Osorio said that the first estimate of Brazilian production for crop year 2008-09 indicated a figure of between 41.3 and 44.2 million bags, comprising 31.5-33.7 million bags of Arabicas and 9.5- 10.5 million bags of Robustas.

The country's production in 2007-08 was 33.7 million bags, comprising 23.5 million bags of Arabicas and 10.2 million bags of Robustas.

"On the basis of the information provided by Brazil and other data received, I am in a position to provide a preliminary estimate of the 2008-09 crop between 123 and 126 million bags, compared with around 116 million bags in 2007-08. Meanwhile, if the annual growth rate of 1.5 per cent to 2 per cent is maintained, the global consumption will rise from 123 million bags in 2007 to more than 125 million in 2008," he added.