Coffee exports up on global price recovery

Chennai: With less production in Brazil due to drought and increasing demand in global markets, coffee export from India since January 1 has risen around six per cent in volume and 15 per cent in value over the same period a year before.

According to Coffee Board data, from January 1 to this Tuesday, our coffee export and re-export was 46,000 tonnes, as against 43,436 tonnes a year before. In value terms, $119.2 million (Rs 805.3 crore) from $103.3 mn (Rs 699.4 crore).

Exporters hope this rising trend in prices will continue. The Arabica variety is Rs 9,200-9,500 a bag (50 kg), from Rs 8,500 in December. Three years before, it was Rs 12,000-13,000 a bag. Even so, the current level would enable one to break even, says Rohan Colaco, a major grower in the Karnataka region, major source for the country's coffee.

India has traditionally been an Arabica market but growers have switched over the years to Robusta, as global demand for this variety has increased — mainly for instant coffee. Robusta is now Rs 7,000-7,200 a bag, from Rs 6,200-6,300 in December (exporters contend Indian Robusta is better than Brazil's in quality).

Over the past three-odd years, exporters have been through difficult times due to drops in prices and production and a rise in production cost.

Analysts expect global prices to strengthen further. According to the New York-based Intercontinental Exchange, Arabica is $147.80 a pound, expected to be $150.35 in March and $154.10 by July. Robusta on the LIFFE (London) is expected to touch $2,158 a tonne in March 2017 as compared to $2,156 now, and to increase to $2,202 in July. December was $2,200 a tonne, highest in a year, from $1,400 a tonne only 12 months earlier.

In 2016, Arabica shipments from India grew around 18 per cent to 51,648 tonnes (43,785 tonnes in 2015). Robusta export was up around 20 per cent at 201,000 tonnes (167,000 tonnes in 2015).

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.