India's coffee exports are expected to increase marginally to 5.02 million bags in the ongoing 2014-15 marketing year even as Indian coffee remains high-priced in the global markets, says the latest USDA report.
The country is estimated to have exported 4.8 million bags of coffee in the 2013-14 marketing year (October- September). One bag contains 60 kg of coffee.
"Indian coffee remains high-priced in global markets. Demand remains sluggish as buyers are withholding major purchases in anticipation of newer crop arrivals.
"... Exporters indicate that with farm gate prices at current level, export channels will be the most likely destination for Indian coffee beans," the USDA said in its latest coffee report.
The report said industry sources indicate that average farm gate prices are almost 35 per cent higher than last year. "As such, growers and large exporters are holding stocks in anticipation of even higher prices."
The average farm gate price of Arabica coffee was quoting Rs 9,712 per 50 kg in September this year, much higher than Rs 6,393 per 50 kg in previous year.
Similarly, the average farm gate price of Robusta coffee was quoting at Rs 3,384 per 50 kg as against Rs 2,945 per 50 kg in the review period, according to USDA data.
India's overall coffee supply this year is expected to be higher at 8.3 million bags in view of increased opening stock, as against 8.15 million bags in the previous year.
In the 2014-15 marketing year, coffee production is estimated at 5.1 million bags as compared to 5.07 million bags in 2013-14, the report said.
"While the planted area remains split evenly between Arabica and Robusta, growers in Karnataka, the largest area, are anticipating Robusta yields will be higher than last year due to improved agronomic practices," it said.
Arabica yields are expected to be lower since this will be an 'off' year in its biennial cycle.
Arabica crop harvesting begins in November or early December while the Robusta crop harvest begins in January and production typically arrives in the market by the end of the month it is harvested.