India's coffee exports are likely to decline 5.6 percent to 4.7 million bags in the ongoing marketing year ending in September due to weak demand from major European buyers, a latest USDA report said.
The country had shipped 4.98 million bags of coffee during the 2013-14 marketing year (October-September). One bag contains 60 kg of coffee.
In its latest report, the US Department of Agriculture (USDA) said: "Current 2014-15 marketing year exports are estimated at 4.7 million bags."
The expected drop in volumes of coffee exports is due to sluggish demand from major European buyers, it added.
According to the USDA report, India's Robusta coffee variety has a good reputation among international buyers. European countries continue to be the major buyers of Indian coffee.
Italy, Germany, and Russia are the top export destinations for Indian coffee. India exports an estimated 90 percent of its production.
India's actual exports are virtually equivalent to production, but include 1 million bags of coffee that are imported duty free for processing and re-export under a special re-export programme, said the report.
On prices, the USDA report said that average Arabica coffee variety prices at the International Coffee Organisation (ICO) indicator have fallen by 15 percent between January and March while Robusta prices have remained firm.
Domestic prices are largely driven by international prices and trade sources indicate that global supplies of Robusta are keeping prices at lower levels.
"Robusta prices are expected now to remain firm until the onset of the next harvest as strong foreign demand pressures Indian supplies," the report said.
As per the Coffee Board data, the major shipment ports for coffee in India are Mangalore (Karnataka) and Cochin (Kerala) ports followed by Chennai (Tamil Nadu) in SouthernIndia.
India's overall coffee production is estimated to be slightly higher at 5.1 million bags in 2014-15 marketing year, as against 5.07 million bags in the last year.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
