The Coffee Board recently unearthed a scam involving coffee exporters who were diverting their shipment consignments paid against Indian rupees and meant for Russia to hard currency markets. Coffee exports to Russia witnessed an unprecedented surge this year when coffee exporters reportedly began cashing in on selling coffee at discounted prices meant for Russia in markets like the US, Germany and Italy.
Highly placed sources in the Coffee Board alleged that apart from coffee, commodities such as spices were also being diverted to other markets in this way. Philipose Mathai, who is on the Coffee Board told Business Standard yesterday that because of this misuse the central government might hive off certain commodities like coffee permitted to be traded under this debt repayment programme. Coffee can be removed from this list,'' he said.
He also admitted that this misuse of trade practice came to light when an exporter wrote to the Coffee Board complaining about diversion of these shipment consignments.
Moreover, Russia which had been experiencing a coffee shortfall, suddenly witnessed a boom. From this experience we have learnt to be careful to analyse such sudden highs or lows in the exports,'' Mathai admitted.
Meanwhile the Coffee Board has dispatched notices to 20 exporters demanding letters of confirmation of their coffee consignments having reached Russian shores. The companies which were exporting to Russia from January 1 to August 20 this year were Allana Sons, Nestle India, Olam Exports (India), Ramesh Enterprises, Amalgamated Bean Coffee, Tata Tea, Asian Coffee, Brooke Bond India, Aspinwall and Co and Continental Coffee.
From April 1 to August 26 this year, permits for 24,224 tonnes of coffee were issued, out of which 21,556 tonnes have been confirmed. The whereabouts of 3000 tonnes of coffee are untraced.
Mathai has also written to the Centre about the suspicions of the Board and demanded an investigation into this misuse.
The major loser in this scam will be the government of India, since it was being short-changed on foreign exchange in these transactions.To guard against further misuse, the Coffee Board will now insist that exporters should provide them with landing certificates supported by necessary customs documents from exporters. Pending permits will also carry the Board's seal on all documents forbidding diversions.
Mathai said coffee exporters on the other hand were claiming their innocence and inability to control coffee shipments when they were on the high seas.
