Coffee Board Cracks Whip On Exporters, To Limit Permits

The Coffee Board has decided to tighten its grip on the coffee industry by issuing a new set of conditions for granting export permits, even as the domestic market plunges into a small crisis over shooting prices.

The Coffee Board chairman, Philipose Matthai, recently wrote to coffee exporters, stating that from April 1997, permits to export certain grades and bulks of coffee will no longer be issued by the board as a matter of course.

Claiming to be acting on the complaints from foreign importers, roasters and various sources, Matthai pointed out this action had become necessary to keep up the quality of Indian coffee in the international market.

 

Even as the growers, exporters and traders are at present in a bind over the temporary rising prices of coffee, none in the coffee industry wanted the Coffee Board to flex its muscles at this stage. Fearing a backlash by the government in the form of a cap on exports, planters are hurriedly meeting tomorrow to debate on the feasibility of introducing a cheaper robusta blend in the domestic market.

Exporters, meanwhile, felt that any interference by the government to stem rising prices would create an unfavourable impression about Indian coffee in the foreign market.

However, Matthais letter seemed to convey that the Indian exporter was already creating a poor impression overseas. I have been told some of the recent Indian consignments are once again giving signals to the market that we are only cheap mass producers and not producers of quality coffee, he has written.

Matthai reminded exporters that last year, the board had issued permits for certain grades and bulks of coffee only after exporters had requested that such varieties were the demands from the buyers.

However, Matthai pointed out that from April 1997 onwards, such permits will not be issued by the board as a matter of course. These grades will henceforth be tested and tried in all aspects by the board before a permit will be issued, he continued. A coffee exporter, Ashwin J Shah, director, Madhu Jayanti International, who feels the Coffee Board should restrict its hold over the industry and behave like the Tea Board, criticises the move.Its not clear what steps the chairman is going to take to curtail export permits. The letter is vague and the decision is unilateral. If he has received complaints about some exporter, punish that person. Why is he punishing the entire exporter community? Shah said According to him, $180 million will be lost in foreign exchange if the board begins to limit coffee export permits. Out of the countrys total coffee production of 2 lakh tonnes, nearly 1 lakh 50,000 tonnes of coffee are exported. Out of this, 50,000-60,000 tonnes of coffee has already been committed by shipments,

he claimed. In his letter, Matthai has also raised the issue of differences in quality shown in the export permit and in the consignment which actually leaves the Indian coasts. It was a dangerous type of transaction, he said, and warned the exporters to refrain from this misuse.

Refraining from actually naming any company, Matthai advises the exporters not to purchase inferior quality of coffee and sustain quality blends in the domestic and international markets.