)
India’s coffee exports are likely to witness a moderate decline in 2014-15 because of owing to lower crop harvested for 2013-14. Although the country’s exports registered a marginal growth of 2.8 per cent in 2013-14 to 313,035 tonnes, exports in 2014-15 are likely to drop below the 300,000-tonne mark in the current financial year.
“Even for 2013-14, we had expected a lower level of exports. However, due to a sudden spurt in prices of Arabica in February and March, the exports picked up in the fourth quarter. As the harvested crop for 2013-14 is far below expectations, exporters will not be able to make big gains in the new fiscal. Also, the prices have seen a downward correction for May and June deliveries,” said Ramesh Rajah, president, Coffee Exporters’ Association of India.
Prices of the Arabica variety, which shot up sharply in February and March to a high of 232.75 cents per lb (pound), have new corrected downwards and ruling at 177.90 cents per lb for delivery in May 2014. The rise in prices came after the news that the Brazilian crop would be lower this year due to drought in January and February. However, the prices have corrected following the news that Brazil received rains subsequently and its crop will not be that bad as was predicted, Rajah said. He added that the price scenario for the current year will be known by June, when Brazil harvests its crop.
For the next quarter ending June 2014, the prices should be in the range of 165-190 cents per lb, he added. “The market is still waiting for more information to come from Brazil on its crop,” he said. Prices are still higher than what was prevailing during the early quarters of 2013-14, but the benefit of high prices in the coming months might not come due to lower surplus available for exports. As a result of the short crop (much lesser than the expected crop) harvested by farmers for 2013-14, the availability of beans for exports will be lower. “In all probability, exports from India will be below the 300,000-tonne mark for 2014-15. Further, appreciation of the rupee will also play its role,” said Rajah.
However, in rupee terms, the value was almost the same as last year due to the depreciation against the dollar. The value of exports in Indian rupee terms stood at Rs 4,769 crore in FY14 against Rs 4,639 crore, a marginal growth of 2.8 per cent. The unit value realisation was flat at Rs 1,52,360 a tonne against Rs 1,52,466 a tonne in 2012-13, according to the Coffee Board of India.
While the rupee’s depreciation helped exporters earn higher revenues during the year, the lower prices in the international markets offset the gain. Over the past year, Arabica prices have slid 23 per cent in 2013 following robust Brazilian production and a recovery in output in neighbouring Colombia, the world’s second-largest Arabica grower.
However, in February alone, worries about this year’s Brazilian supplies pushed the price of Arabica futures up 44 per cent, the biggest monthly percentage increase in almost two decades. The dry weather afflicting Brazil’s main coffee-growing region will lead to a 10 per cent decline in coffee output this year, the country’s National Coffee Council said last week.
ICE Arabica coffee futures for May delivery soared 7.3 per cent to $1.9345 a pound, a two-year high. March coffee jumped 7.1 per cent to $1.9260 a pound, bringing year-to-date gains to 74 per cent. LIFFE robusta coffee futures for May delivery settled up $55 at $2,098 a tonne.
In the fourth quarter, the price realisation improved for Indian exporters by 4.5 per cent to Rs 1,54,245 a tonne from Rs 1,47,581 a tonne in the fourth quarter last year.
