India's coffee exports may drop from the last year's record level to 5.1 million bags in the 2013-14 marketing year, due to a dip in production as well as low export prices, a report has said.
The country is estimated to have shipped a record 5.2 million bags of coffee in the 2012-13 marketing year (October- September). One bag contains 60 kg coffee bean.
"Exports for 2013-14 marketing year are forecast at 5.1 million, down by 1,05,000 bags from last year's record level," the US Department of Agriculture (USDA) said in a report.
"Lower export prices, domestic crop reduced by monsoons and better yield in major coffee-producing countries are expected to temper Indian exports, but exporters are optimistic that significant volumes of coffee will be exported," it said.
However, foreign demand for Indian beans and processed coffee is expected to remain strong on the back of weaker rupee, the report added.
On weak export prices, the USDA said while Indian Arabica remained steady, prices of Robusta, which comprises the bulk of Indian exports, have dropped sharply in anticipation of a larger global supply. This supported the expectation that exports will be competitively priced. The USDA's projection of India coffee production is significantly lower than the Coffee Board of India's estimate of 5.7 million bags for 2013-14.
According to the report, heavy rain in major coffee-growing regions, especially in Karnataka that contributes 70% of the total production, appears to have reduced yields. The bulk of India's coffee production is exported and the domestic industry's marketing efforts are very much focused on export promotion.
There are indications that the popularity of coffee is increasing with the spread of both foreign and home-grown coffee shops, it said. However, exports continue to siphon a large amount of coffee away from the domestic market, and consumption estimates are unchanged, the report added.
Italy, Germany, Russia and Belgium are the top markets for Indian coffee exports.
Source:- economictimes.indiatimes.com
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