Coffee exports to dip by 15% as Re rises

Indian coffee exports are likely to decline by 10-15 per cent to about 2.1 lakh tonne in the current financial year owing to a strong rupee and lower production, the apex body of coffee traders has said.

"Coffee exports are likely to decline by about 10 per cent in the current financial year and are estimated at 2.1-2.2 lakh tonnes due to lower crop and a strong rupee," Bangalore-based Coffee Exporters' Association President Ramesh Rajah said.

Rajah said coffee exports stood at about 2.4 lakh tonnes in the last financial year. Italy, Germany and Russia are the major export markets for Indian coffee. He said "shipments were bad" in the current quarter of 2007-08 as arrivals have been less in markets as farmers were holding back stocks in anticipation of higher prices. Besides, exports have become expensive due to appreciation in rupee, Rajah said.

Rajah hoped arrivals would improve in the second quarter as farmers cannot hold the stocks beyond a limit.

The coffee production in 2006-07 season ending September is estimated at 2.7 lakh tonnes, Rajah said, adding the output of arabica variety would be 80,000 tonnes while robusta would be 1.9 lakh tonnes.

However, according to estimates by the Coffee Board, output in the current season would be 2.88 lakh tonnes.

Rajah said the coffee production in the coming season starting October 2007 would rise to 3 lakh tonnes.