Mumbai: India’s coffee exports fell 11% in 2007 due to a rise in the rupee and lower production, an official from the Coffee Board said on Tuesday.
Total exports were 223,565 tonnes in 2007, compared with 250,980 tonnes a year ago, said the official, who did not want to be named.
“We are hoping for a recovery in 2008, but right now it doesn’t look so good,” said Ramesh Rajah, president of the Coffee Exporters’ Association of India.
India’s arabica exports fell 29% to 42,139 tonnes in 2007, while robusta fell 15% to 111,582 tonnes.
A sharp increase in freight rates also affected exports, he said adding freight rates to European countries rose to $1,700-$1,900 per container from $1,200 a year ago.
India exports coffee mainly to Italy, Germany and Russia. Italy accounts for 24% of the country’s exports, followed by the Russian Federation and Germany with 12% and 5% respectively.
The unit value realization of coffee has increased to Rs87 per kg from Rs77 a year ago due to higher international prices.
Growers and exporters have failed to encash the benefit of higher unit prices due to rising rupee and higher freight rates, Rajah said.
Falling short: Total exports of coffee stood at 223,565 tonnes in 2007, compared with 250,980 tonnes a year ago.
The rupee has appreciated more than 12% against the US dollar since January 2007.
However, exports of instant coffee rose 86% to 51,104 tonnes due to higher demand from Russia, traders said.
“If you look at it, people are switching over from the traditional way of making coffee to the more convenient instant coffee,” said Venkat Krishnan of General Commodities Ltd.
Instant coffees are made from robustas, which are generally lower grade coffees than arabicas. Traders said exports in 2008 is likely to improve on expectation of a global shortage. India produces only 4.5% of the world’s coffee and exports 70%-80% of its output.
World coffee output in 2007/08 would be at 116 million bags of 60-kg each, below an earlier estimate of 118 million bags, according to International Coffee Organization.
“We are expecting the coffee exports to be 210,000-230,000 tonnes in 2008,” said Rajah.