Several exporters have postponed their consignments due to a fall in the rouble, which has depreciated 50 per cent in two quarters. While the depreciation has hurt Russia’s capacity to import, a sharp fall in crude oil prices has hit that country’s foreign exchange income, as Russia is a major exporter of crude oil.
Due to the fall in demand from Russia, coffee prices in the international market have softened. Prices of the arabica variety have fallen about 20 per cent in two months.
Exporters feel in an environment when the currency is highly volatile, allowing coffee shipment under the rupee-rouble route will be helpful, though the rate of the rouble has to be decided.
Against 40/dollar six months ago, the rouble now stands at 60/dollar.
Exporters have discussed the issue with the Coffee Board. An official of the board said, the reaction was mixed, with some exporters sending consignments, while others had postponed these. “However, they feel the Russian crisis is likely to have a deep impact. I feel if Indian coffee exports are allowed under the rupee-rouble arrangement, it will be helpful,” the official added.
For Indian exporters, the Russian market is the third-largest destination, after Italy and Germany. Annual exports to Russia stand at 28,000-30,000 tonnes.
The Coffee Board official hoped “with the winter setting in, it is likely coffee demand from Russia might be revived, as it is a daily consumption item”.
Globally, production is falling. It is expected Brazil, a major producer, will record a decline.