Coffee exports may reverse slide on higher output

Coffee exports from India, Asia’s third-biggest supplier, may match 2008-09 levels on expectation of a bigger crop, helping reverse a decline in shipments seen in the first two months of the season, the Coffee Board said.

Shipments in the year to March may be 200,000 tonnes, GV Krishna Rau, chairman of the state-run agency said. Overseas sales were 38,059 tonnes between April and June, 12 per cent lower from a year ago period.

Increased supplies from the south Asian country, which exports 80 per cent of its production, may add to a 28 per cent slide in robusta prices in the past year. The bitter-tasting bean is used by producers of instant coffee.

“We expect the shortfall to be made up in four quarters as more coffee will be available for exports,” said Rau. The crop condition is “generally good” and the board will release its first production estimate within a week, he said.

Production may climb 7 per cent to 300,000 tonnes in the year starting October 1.

Robusta for July delivery advanced as much as 1.4 per cent to $1,559 a tonne on London’s Liffe exchange and was at $1,548 a tonne at 3.56 pm Mumbai time. Arabica coffee futures for July gained as much as 1.1 per cent to $1.32 a pound in New York.

India pared its production estimate for the crop harvested in October after heavy rains in the southern state of Karnataka, the nation’s biggest bean grower.

Output will decline to 262,300 tonnes in the year ending September 30, compared with 276,600 tonnes forecast in November, the board said April 30.

Export permits issued by the board fell 12 per cent between April and June. Shipments were 19 per cent lower at 91,787 tonnes in the year began January 1, the board’s data shows.

Italy and Russia are among the major buyers of Indian coffee.