Home >Industry >Coffee exports from India seen climbing as record harvest looms

New Delhi: Coffee shipments from India may increase the most in four years as prospects for a record crop in Asia’s third-largest producer spur farmers to liquidate inventory.

Exports will rise as much as 10% in the year through March 2016 from 286,516 metric tonnes last year, said Ramesh Rajah, president of the Coffee Exporters Association of India. That would be the biggest gain since 2011-2012, when sales jumped 11% to 333,181 tonnes, data from the state-run Coffee Board show.

Rising sales from India to mostly Europe and Russia will add to a global surplus forecast by Societe Generale SA and weigh on robusta prices in London. Supplies from the South Asian nation may help bridge a shortfall in shipments from Vietnam, where farmers are hoarding the most beans in at least five years on speculation prices will rally further. Robusta accounts for about 70% of India’s exports.

“With a larger crop expected next season, the small farmers will keep selling" as they can’t bear the storing and logistic costs, Rajah said by phone from Bengaluru on 14 July. “The crop was low in 2014-15 and farmers held back and the prices went up."

Robusta futures last month rose 9.3%, the most since February 2014, and closed at $1,725 a tonne on ICE Futures Europe on Wednesday. Arabica prices, which advanced 5% in June in New York, were at $1.2975 a pound on 15 July. Societe Generale predicts a surplus of 905,000 bags of 60 kilograms each this year.

Production in India will rise 8.7% to a record 355,600 tonnes in 2015-16, the board estimates. Timely monsoon rains have boosted crop prospects, according to Anil Kumar Bhandari, a member of the state-run agency.

“We are heading for a very good crop," Bhandari said by phone from Bengaluru on July 13. “The coffee-growing belt in Karnataka and Kerala has got adequate rains."

Exports rose 12% to 102,850 tons between 1 April and 13 July from the same period a year earlier, provisional data from the board show. Italy, Germany and Russia were among the top buyers of Indian coffee. Bloomberg

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