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Despite a four per cent decline in volumes at 3.129 lakh tonnes (lt), India’s coffee exports registered a marginal growth in dollar value terms at $740 million for the year-ending March 31, 2021. The dip in volumes was mainly on account of poor demand from the main buyers in Europe such as Italy and Germany, where out-of-home consumption was impacted by Covid-led lockdowns.
However, the average realisations saw a 10 per cent growth on account of rise in global prices and currency movement. Average realisation went up to ₹1.75 lakh per tonne during the year against ₹1.59 lakh in the previous year. In rupee value terms, the exports grew by 5.6 per cent to ₹5,490 crore.
Uncertain outlook
“The drop in exports is in line with expectations,” said Ramesh Rajah, President, Coffee Exporters Association. “Next year also, we see exports at the same level. We don’t see any major increase again because of the continuing Covid pressure,” Rajah said.
“The outlook for the current year is uncertain due to the second wave of Covid in Europe. As the hospitality and restaurant segment has been affected, buyers of Indian coffees continue to be apprehensive,” said MP Devaiah, Director – Coffee at Allanasons Ltd, a large commodity exporter.
Europe is the main market for Indian coffees, where varieties such as Robusta Parchment or Washed Robustas command a premium. Small and medium-size roasters, who cater to out-of-home segment in Europe, are also facing uncertainty and had, in fact, shifted to the cheaper coffees of other origins such as Uganda in the second half of 2020.
Instant coffee, a hit
Interestingly, the demand for instant coffees has risen in the January-March quarter this year. The instant coffees are largely consumed in-house and mainly sold through the supermarkets.
Instant coffees, including the re-exports grew by 10 per cent in volumes at 31,117 tonnes (28,241 tonnes). However, instant coffees shipments including re-exports for the fiscal 2020-21 are lower at 1.02 lakh tonnes (1.16 lakh tonnes).
“Sales for the supermarket segment are doing relatively better. However, we are worried about the realisations as the instant coffee, which is used at home is cheaper,” Rajah said. The marginal improvement in average realisations during 2020-21 is unlikely to be sustained, he said adding that it may be lower by 10-15 per cent this year. The premiums for Indian washed robustas have almost halved and the prices are lower by 20 per cent this year.
“Though the premiums have shrunk for Indian washed robustas, our coffees are still considered very expensive as compared to other origins on a delivered basis. The rise in freight rates is also contributing to it,” Rajah said.
The Coffee Board has pegged the 2020-21 crop starting October at 3.42 lakh tonnes in its post monsoon estimate, higher than the previous year’s final estimate of 2.98 lakh tonnes. India exports about two-third of its coffee and the domestic consumption is seen at a little over one lakh tonnes.
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source https://earn8online.com/index.php/238134/coffee-exports-gain-aroma-on-higher-global-prices-despite-fall-in-volume/
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