Kochi :
Though coffee prices continue to move in a lower range, rising demand for the robusta variety may provide some relief to exporters. High demand and the prospects of a lower crop in Vietnam, the largest producer of robusta coffee, are expected to stoke a rally in prices. Arabica prices have crashed in the world market owing to a bumper crop in Brazil.
“There is a good demand for robusta cherries. We can expect a good offtake of the variety in the next few months,” said Ramesh Rajah, president of Coffee Exporters Association of India.
However, the issue is whether India will be able to offer robusta at a competitive price. Robusta prices touched $2,139 tonne in the world market on Monday. “But right now India is offering its produce at a price which is higher by $75-100 per tonne compared to the shipments from Vietnam and Uganda. Buyers are increasingly looking for coffee from cheaper origins,” said an officer of major exporter NKG Jayanti Coffee.
Exporters are expecting higher robusta supplies and the fresh stock will enable shipments at competitive rates. Planters have forecast a lower crop for both varieties. But the robusta crop is not as bad as arabica, which is predicted to be one of the worst in the recent times due to pest attacks. On Monday, the arabica price stood at $1.35 per pound. “The harvest has been just over and we are still assessing the total output. From what we gather, it could be near to our earlier estimates of 80,000 tonne of arabica and 2 lakh tonne of robusta,” said Nishant Gurjer, chairman of the Karnataka Planters’ Association.
Coffee Board’s post-monsoon estimate for 2012-13 is 1,00,225 tonne of arabica and 2,15,275 tonne of robusta. Meanwhile, reports of a possible lower crop in Vietnam have raised the hopes of Indian coffee exporters. The earlier estimate was that the Vietnam crop will be at 25 million bags (of 60 kg each) but it now appears that the harvest could be still smaller. “If the Vietnam crop is low, robusta prices will move up in the world market,” said an exporter.
Such a situation augurs well for Indian coffee exporters as it will lead to better earnings. Coffee exports for this calendar year have gone up marginally because of the export of the carryover arabica stock.
source: http://www.articles.economictimes.indiatimes.com / Home> Markets /by PK Krishnamurthy, ET Bureau / March 26th, 2013