India Coffee Exports In Decline for Second Straight Year

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Coffee exports from India may drop to below 300,000 bags this year, which would represent a second straight year of decline.

Sources in a recent Bloomberg report suggest that demand is especially down for Indian arabica in the European market as buyers there continue to look for cheaper robusta coffee. The report also notes decreased production due to pest infestations after atypical weather. Here’s more from the Bloomberg report:

A drop in Indian supplies may help limit a 39 percent slump in arabica prices in the past year in New York and cut costs for Starbucks Corp. and Nestle SA. Stockpiles monitored by ICE Futures U.S. reached 2.63 million bags of 60 kilograms each on Feb. 1, the highest since March 2010. Slowdowns in Italy, Russia and Spain, India’s main buyers, curbed demand for the commodity brewed by specialty coffee makers.

“The order book is thinner this year because the economies of the main markets aren’t faring well and buyers are aggressively searching for cheaper coffee,” Rajah said. “Arabica exports from India will be lower as prices have come down sharply and shippers don’t want to sell at these prices.”

The full story: Bloomberg