The dip in Arabica prices has hit export revenue of coffee producers across the world.
According to the International Coffee Organisation’s (ICO) latest report, the average monthly earnings from shipments have declined 25 per cent to $1.5 billion. India’s coffee exports too have declined by 2.85 per cent to 1,72,480 tonnes so far in the 2013 calender year due to weak global prices, according to the Coffee Board. The country had exported 1,77,555 tonnes in the same period of January-June last year. The export realisation for India was down at `1,47,555 per tonne between January and June first week of this calendar year, as against `1,46,991 per tonne in the same period last year. In terms of value, total coffee exports were down at `2,545 crore as against `2,609 crore in the review period.
“The significant reduction in arabica prices is having a negative effect on revenue for coffee producers,” ICO said.
Monthly shipments have consistently maintained a volume of 8-10 million bags of 60 kg each since the beginning of 2012, “but the revenues accruing from these exports have declined from over $2 billion to around $1.5 billion,” the report pointed out.
The monthly average of the ICO composite indicator price fell to 126.96 US cents per pound in May 2013, its lowest level in over three years. This average is also 19.5 per cent lower than that of May 2012, with decreases recorded in the last four consecutive months.
ICO further said that the problem of lower export revenue is compounded by the fact that the cost of production has been rising in many exporting countries.
As per the ICO data, the world coffee exports reached 9.6 million bags in April, a 4.4 per cent up on April 2012. This brings the total export for the first seven months of 2012-13 coffee year (Oct-Sept) to 66 million bags, a 7.1 per cent increase on the 61.6 million bags exported in the same period last year.