Coffee exports decline 8.5% to 283,929 tonnes in FY15

Decline in shipments is mainly due to fall in price in international markets during Jan and March 2015

Even as the domestic coffee production hit a record high, India’s coffee exports have declined 8.5 per cent to 283,929 tonnes for the financial year ended March 2015. During 2013-14, India exported 310,471 tonnes. The decline in exports is mainly due to a fall in price in the international markets during January and March 2015.

In value terms, exporters earned 3.7 per cent higher returns at Rs 4,906 crore compared to Rs 4,729 crore, with average unit value realisation going up by 13.4 per cent to Rs 1,72,783 per tonne compared to Rs 1,52,306 per tonne. In dollar terms, the realisation was up by 1.9 per cent to $803 million from $788 million a year ago.

Though the industry expected decline in FY15, the percentage decline is not too steep due to better crop this year, exporters said.

“Last year also, we had seen lower exports. During FY15, we thought exports would be better due to higher crop. However, due to sudden drop in the prices during the January-March quarter following the news that Brazil would harvest higher crop in the coming harvest season, resulted in lower exports in the overall financial year,” Ramesh Rajah, president, Coffee Exporters’ Association told Business Standard.

He said, going forward, there is not much hope for upward correction in prices. Brazil is set to harvest a higher crop starting June this year and the news that it will come out with a much larger crop in 2016 has dampened the hopes for a rise in prices in the remaining months of 2015, he said. During the next quarter (April-June), exporters are expecting a further decline of 5-10 per cent in the prices globally.

During the January-March quarter, bean prices witnessed downward trend with Arabica prices declining by 30 per cent to touch 125 cents per lb (pound) compared to 180 cents per lb in October 2014.

The news of improved weather in Brazil added to the selling pressure. Farm gate prices in Karnataka, which contributes 70 per cent of India’s coffee output, have crashed by 20-22 per cent since early January.

Arabica prices have declined to Rs 8,750 per bag (each bag is 50 kg) from Rs 11,000 per bag, showing a decline of 20 per cent. Robusta prices have also declined by 20 per cent to Rs 2,800 per bag from Rs 3,500 a bag in December and January.

As a result, exports during the fourth quarter witnessed a decline of 13.7 per cent at 84,258 tonnes compared to 97,684 tonnes in the previous year.

Italy, Germany, Turkey and Russian Federation continued to be top markets for Indian coffee. Top five exporters were CCL Products (India) Ltd, Amalgamated Bean Coffee Trading Co. Ltd, ITC Limited, Allanasons Private Limited and Tata Coffee Ltd.