India's coffee exports decline 5.3% in crop year 2013

Continued global economic slowdown and drop in demand from major consuming countries in the European Union impacted the country's exports

India’s coffee exports have declined by 5.34% to 2,99,266 tonnes in the coffee year ended September 30, 2013 as the demand from European Union and the US remained subdued through the year.

The country had exported 3,16,164 tonnes in the previous coffee year (October 2011 to September 2012), the Coffee Board said.

“The decline in exports was mainly due to weak demand from European nations like Italy, Spain, Greece and Portugal as buyers were looking for cheaper coffees,” coffee exporters said.

The export realisation was down 1.3% at Rs 1,51,379 per tonne between October 2012 and September 26, 2013, as against Rs 1,49,459 per tonne in the previous coffee year.

In value terms, total coffee exports were down by 4.1% at Rs 3,530 crore as against Rs 4,725 crore in the previous year, according to Coffee Board.

A sharp drop in the prices of Arabica during the last fiscal also added to the decline in exports as large number of farmers have withdrawn their sales, exporters said. Arabica prices have declined as much as 20-25%.

ICE Arabica coffee futures for December delivery settled down 1.4% at $1.1565 a pound. “Arabica coffee prices ended within a cent of a more than four-year low on Thursday as big supplies of the beans and tepid demand encouraged selling. Prices were down almost 20% for the year, roasters appear to be waiting for even lower prices due to large supplies particularly from Brazil. LIFFE robusta coffee futures hit an almost three-year low on last Thursday, as expectations of a large crop from top grower Vietnam weigh on prices. LIFFE robusta coffee futures for November delivery settled $43 lower at $1,663 a tonne,” the Coffee Board said.

India mostly exports coffee to Italy, Germany, the Russian Federation, Belgium and Spain. Robusta variety coffee is mainly used in preparation of instant drinks and espressos worldwide.

The outlook for India’s exports during 2013-14 is also not very promising. The Coffee Board has said production in 2013-14 would be at least 10% lower than post-blossom estimates. The Board had said production would stand at 3,47,000 tonnes in its post-blossom estimates earlier this year. In 2012-13, India had recorded production of 3,18,200 tonnes.

“Based on the conditions that prevailed in February and March, when the growing regions received good blossom showers, we had estimated we would achieve 3,47,000 tonnes. However, due to a drought in the two subsequent months and the heavy rains in June, July and August, we anticipate a drop of about 10% drop, against the post-blossom estimates,” Coffee Board Chairman Jawaid Akhtar had told Business Standard earlier this month.

This means for 2013-14, the country's bean production could be about 3,12,000 tonnes. However, growers estimate it at 70,000-2,90,000 tonnes. The lower production will, however, impact the country’s exports for the next crop year as well, exporters added.