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G. Chandrashekhar

MUMBAI, Aug. 6

THE coffee market has been one of the most volatile commodity markets. In recent year, a sustained depression in world prices has been the main feature of the coffee market.

Although world coffee exports have trended up since 1998, prices have taken a severe beating as can be seen from the accompanying table.

A consistent reduction in unit value realisation has left many producing countries and coffee growers on the verge of financial collapse.

Efforts to curtail output and hold back export surplus have not met with success.

In the last five years, world coffee exports expanded by 12 per cent or about 10 million bags.

However, total export earnings shrunk by a massive 58 per cent during the period. The loss of value amounted to $ 7.5 billion.

Domestic scene: India is small player in the world coffee market with a share of around four per cent.

Export of coffee from the country increased since 1997, but the growth momentum was broken in 2001. India's unit price has followed the weakness in other origins.

Encouraged by higher domestic production, since 1997 Indian coffee has made impressive gains in the export market, reaching a high in 2000.

If we compare performance in 1997 with 2001, the volume gain is 42 per cent, but export realisation is down exactly by 42 per cent.

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