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Falling coffee prices a dampener for exporters

Falling coffee prices a dampener for exporters

Falling coffee prices a dampener for exporters

Coffee prices have been on the decline in the past few months, with Brazil and Vietnam, two of the largest producers, heading for a bumper crop. Harvest of Arabica in India started earlier than usual in the last week of November. Plucking of Robusta beans is also expected to begin by the end of December. 

"Arabica growers could suffer as demand is weak in the global market and there is some carryover stock of Arabica parchment in India from last year,'' said Ramesh Rajah, president of the Coffee Exporters Association of India. 

On Thursday, the December Arabica futures prices at ICE New York stood at $1.18 per pound. In India, prices are ruling around ?6,800 per 50 kg, marginally higher than the cost of production. Robusta prices in the world market had shrunk nearly 18% this year. "The Robusta shipments, however, will move at lower prices as there is demand,'' Rajah said. 

While growers are expecting Arabica crop around last year's level of 90,000 tonnes, they feel that Robusta output could be hit badly by the severe dry spell and delayed monsoon this year. 

"We are expecting a Robusta crop less than last year in Karnataka because of drought and erratic rains," said HT Pramod, chairman of Karnataka Planters' Association. 

But the Robusta output is said to be better in Wayanad in Kerala, which could bring down the overall deficit. Robusta crop is estimated to reach around 2.10 lakh tonnes, slightly less than 2.17 lakh tonnes in 2016-17. The Coffee Board has predicted 2.47 lakh tonnes of Robusta and 1.03 lakh tonnes of Arabica in its post blossom estimate for 2017-18. 


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