High demand abroad, but a weak dollar may hurt realisations.
Coffee exports from India will exceed last year’s figure, despite a possible downward revision of crop estimates for 2010-11, on the back of robust demand from importing countries.
India exported 204,174 tonnes coffee last year. The target this year is 210,000 tonnes.
“Coffee export may exceed this year’s projection, on the back of sound demand,” a top Coffee Board official said.
The Board is in the process of preparing ouput estimates for this crop year. Industry experts and planters feel there will be a 10-15 per cent fall, due to heavy rainfall this month in the major growing regions in November. “Still, this will be a good crop year as compared to last year,” the official added.
Minister of State for Commerce and Industry, Jyotiraditya M Scindia had told Parliament the government had issued permits for export of 184,372 tonnes, more than 80 per cent of the year’s target.
October alone saw a 67 per cent rise in exports to 25,000 tonnes, against 15,000 tonnes exported last year in the period. “This year is expected to be a record crop year. Also, on the back of production shortfall in major countries like Brazil, Indian coffee will find more buyers in the international market,” said A N Devraj, a Hyderabad-based trader. He said the picture would be clear after mid-January, after the arrival of the new crop.
Realisations, experts said, would be adversely affected by the weak dollar. It is currently Rs 44 to a dollar, putting pressure on the margin, said Devraj. International prices are at $2.04 per pound from an earlier $1.7 for the Arabica variety, with a similar rise for Robusta. Despite such high prices, domestic planters are not able to cash in on higher realisations due to the appreciating rupee.
However, some officials differ on output. “Exports will not exceed last year’s figure, as production is expected to fall by 10-15 per cent due to untimely rain in Karnataka and adjoining growing regions,” said Jabir Asghar, vice-chairman of the Coffee Board. Arabica production would fall, he said.
