Trade Articles

The first quarter of the year 2008 has brought lots of cheers for the Indian coffee industry as an upward trend has been notified in terms of the quantity, unit value realization as against of the same corresponding year in 2007. The analysis done by the United Planters Association of Southern India (UPSAI) has stated that during the first quarter of 2008, coffee exports have reached to the mark of 62,000 tonnes with a valuation of Rs 242.49 crore. The UPSAI said that the exports had recorded the unit value realization of Rs.23.58 per kg. The speedy resurgence has been witnessed from the last fiscal year in the Indian coffee industry when it comes about the value realization. The augmented increase has been seen in the value realization by Rs 30.96 crore, the UPSAI analysis said. There has been an increase in the unit value realization per kg of exported coffee in current fiscal year. Rs 12.73 per kg increase has been recorded in 2008 in comparative of previous year.

The movement in the international coffee price pattern was somehow in comparative to the realization of prices at the domestic auctions, according to the study, adding further that this was considered to be expected lines as the Indian coffee industry which has seen an increase as the export orientation of the sector was raised at 75%. The coffee exports in throughout the world has seen a declining trend as it has come down to 90.6 million bags in 2008 from 95.4 million bags of 2007. The UPASI has remarked that though the domestic coffee production in 2008 was down at 2,62,000 tonnes in comparative of 2,88,000 tonnes of 2007 but unit value realization in 2008 has gone up. The UPSAI survey says that the India's total coffee crop in fiscal year 2008 is expected to touch the mark of 2,93,000 tonnes which is more by 31,000 tonnes as against of the previous year production. As per the Coffee Board, the declination in 2007-08 production was contributed to the decrease in the robusta production which has decreased by 10 per cent and arabica coffee output by 7.2%. Due to this rising and falling trends of the coffee production graph, the marginal mix of the coffee has also been undergone into a change with the rise in the arabica share from 34.6 per cent of 2007 fiscal year to 35.3 per cent of 2008.

In many coffee producing nations, the crop year 2008-09 is already being started, mainly in Brazil where as per the latest estimates the production is being calculated nearly to 51.1 million bags. According to the International Coffee Organization, due to the anticipation of increasing production from Brazil, the 2008-09 world production is forecast at 140.06 million bags in comparative of 128 million bags. The coffee prices trend has shown that the some improvement has been witnessed in the year 2007 which has been followed in 2008 also. As the prices of robusta coffee has increased to reach at Rs 94.93 kg during January-August, 2008, compared to Rs 74.01 per kg in the same period of 2007. It shows Rs 20.92 per kg increase. Going by the statistics of the the Coffee Board, India's coffee exports from October, 2007 – September, 2008, in the crop year has up by 2.54 per cent and has stood up at 230,910 tonnes in comparative of 2,25,187 tonnes exported in 2007. In rupees, coffee exports have gone high to reach at Rs 2,427.86 crore, compared of Rs 1,904.95 crore, realized in 2007. In the terms of dollars, the coffee exports have increased to $586.27 million as against of $443.83 million in 2007.

During the first 9 months, India's coffee exports have shot up by 6.26% to reach at 184,976 tonnes, of what it was 174, 077 tonnes in 2007. Production of robusta in 2009 is expected to increase by 12.1% to reach at 1,90,000 tonnes while arabica output is expected to increase by 3% and touch the mark of 95,000 tonnes. Robusta is expected to constitute nearly 65% of India's total production. There has also been seen an increase in the coffee plantation area under cultivation in recent years in some areas of Andhra Pradesh and Orissa. Total production of instant coffee in 2008-09 is likely to touch the mark of 75,000 tonnes whereas organic coffee is expected to be 300 tonnes. Due to the increasing output and introduction of export incentives, the export in 2008-09 is likely to shoot up by 4.3% to reach at 2,40,000, the report has added. India has the coffee production which is only 4% of the world's total production but the nation is busy in exporting 70%-80% of its output. India is busy in exporting coffee mainly to Germany, Italy, Russia.