Coffee exporters to earn more per tonne this year

Coffee exporters are expected to see higher realisation in the current calender year as compared to last year.

Though concerns over a weaking dollar remains, exporters and traders say this will be neutralised by the higher price of the commodity in the international market.

“Exporters are expected to see higher realisation in the current year as ruling prices of the arabica variety will give higher returns per tonne of coffee this time,” said Ramesh Rajah, the president of Coffee Exporters Association. He said high prices would offset the impact of a possible weak dollar this year.

In 2010, the average realisation per tonne fell six per cent to Rs 1,02,524 a tonne from Rs 1,09,224 a tonne in 2009 due to lower price of the commodity and a weak dollar.

Last year, the country saw a 52 per cent rise in exports to 271,000 tonnes over the corresponding period last year. The exports also went up by 42.61 per cent in rupee terms to Rs 2,787.23 crore in 2009-10 as against Rs 1,954.37 crore in 2008-09.

Babu Reddy, agricultural economist of the Coffee Board, said average realisation would definitely be higher this year as prices of both arabica and robusta were at a comfortable level. “While arabica prices are expected to see a further upside, robusta prices will remain range-bound in the near future. The realisation will be higher for exporters,” he said.

Arabica prices on the US-based ICE Futures are at an all-time high of $2.35 a pound and are expected to rise due to a fall in production in Columbia and Central America. However, Reddy said an appreciating rupee might play spoilsport.

“Overall export data from October 2010 to December 2010 showed that exporters got higher returns and this trend is expected to continue in 2011,” he added. However, planters feel the total realisation will be the same as last year.

“We don’t think planters are going to get higher returns because the higher price of arabica will just compensate for the fall in production in the country,” Sahadev Balakrishna, chairman of Karnataka Planters’ Association said.

While last season, planters were harvesting around 300 kg from an acre, this had come down to 100-150 kg this time, he added.