Coffee exports may dip 10% on rising domestic demand

India’s coffee exports are likely to decline 8-10 per cent in 2008-09 on account of the rising domestic consumption coupled with concern about a fall in production due to inconsistent rainfall.

“There could be a drop of 8-10 per cent in coffee exports. Greater demand from the domestic market, which is growing at double digits, will contribute significantly to this fall,” Coffee Exporters’ Association President Ramesh Rajah said.

Coffee exports stood at 210,000 tonnes in 2007-08.

Rajah said exports would witness a quiet period from September to December, subdued by increasing domestic offtake. However, shipments may accelerate after January, he added.

He ruled out any increase in the domestic prices of coffee because of a rise in demand, saying the rates were already ruling at the higher level.

“Domestic prices are already high. If they are increased further, the industry would like to import coffee rather than take it from local buyers,” Rajah said.

According to the data released by the Coffee Board, the total provisional exports of coffee, including re-exports, in the first seven months of the calender year rose by about 6 per cent to 150,000 tonnes, compared with the year-ago period.

Meanwhile, inconsistency in the monsoon in July added to the woes of coffee producers. Though the Coffee Board said it has “no reason or occasion” to revisit the output target of 2.93 million tonnes, exporters expect a fall of about 5 per cent, citing deficient rainfall.

Some parts of producing states such as Karnataka, Andhra Pradesh, Maharashtra and Gujarat had witnessed scanty and deficient rainfall.