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Vishwanath Kulkarni

"Realisations for growers in rupee terms has dropped by close to eight per cent, compared to last year."

BANGALORE, May 28

ANTICIPATING a rise in international prices, coffee growers are holding back their produce, thereby restricting the exports in the current calendar year.

Coffee exports, from the beginning of the year till date, have slowed down considerably compared to the previous year. Exports from January 1 to May 27, 2003, stood at 65,149 tonnes, as against 1.19 lakh tonnes during the same period last year. Also, the permits issued for exports declined marginally to 1.12 lakh tonnes till May 27, as against 1.23 lakh tonnes last year.

"There is a reluctance from the growers to release coffee as they are expecting a higher price," said Mr Ramesh Rajah, President of the Coffee Exporters Association.

"Growers are expecting the prices to remain constant and move up tracking the likely weather problems in Brazil," Mr Rajah said, adding "as a result arrivals have slowed down, thereby impacting the exports".

Besides, the rupee appreciation has played its role in impacting the exports. However, growers are expecting the realisation to improve in the coming months despite the currency appreciation.

"With export prices denominated in dollars, a stronger rupee leads to lower returns to farmers and reduces selling interest," he said. Realisations for growers in rupee terms had dropped by close to eight per cent, compared to the previous year, Mr Rajah added.

Admitting a slowdown in exports, the Coffee Board Chairperson, Ms Lakshmi Venkatachalam, said, "There's no cause for concern at present and we expect the shortfall will be made good in the next few months." There was still a lot of coffee left and the growers could be holding back speculating the fallout on the likely frost in Brazil, she added.

However, grower-exporter like Mr Ashok Kuriyan of Balanoor Plantation and Industries said the rupee appreciation had impacted his earnings this year. "I have lost close to Rs 1 lakh per tonne this year, due to rupee getting stronger against dollar where prices were not fixed," Mr Kuriyan said.

"Like other growers I cannot afford to hold back on commitments otherwise I'll lose out to others," he added.

`Waive interest on special term loan'

COFFEE growers, who are facing a drought-like condition, apart from battling the crisis due to poor prices, have urged the Government to waive the interest on loans under the Special Coffee Term Loan (SCTL) scheme.

In a representation made to the Reserve Bank of India officials, growers said the waiver of interest extended to the agriculture sector in the drought-hit states, should also be made applicable to the coffee sector.

The rescheduling of loans under SCTL had given some relief to the industry, but the waiver of interest would bail the growers from the present crisis, said Mr Cherian Philip, Chairman, Karnataka Planters Association.

The coffee exporters' association has urged the Government to abolish the export cess and enhance the transport subsidy from the present 50 paise per kg to Rs 2 per kg. It has also asked the Government to enhance the DEPB licences to five per cent as done in the case of other commodities.

Meanwhile, the Minister of State for Commerce, Mr Vidya Sagar Rao, who recently toured the coffee growing areas of Coorg, said appropriate action would be taken to solve the problems faced by the industry.

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