Sharp depreciation of Russian rouble has made coffee exporters view the market with scepticism even as a few of them have postponed their consignments to that country.
Thanks to the currency volatility, exporters have suggested to the Coffee Board to route the commodity to Russia under a rupee-rouble trade mechanism. However, it is no panic situation yet as the exporters are watching the developments on a day-to-day basis.
Russian Federation is the third largest market for instant coffee from India after Italy and Germany. As on December 23 (from January 1, 2014), it has imported 19,446.4 tonnes of instant coffee from India, apart from 1,353.5 tonnes of Arabica coffee, 1,376.3 tonnes of Robusta and 1.821 tonnes of roasted coffee.
“The instant coffee market is very much affected now,” said Sathappan, proprietor of S.L.N. Coffee Pvt. Ltd., one of the top 10 exporters. However, the sharp decline in rouble value vis-a-vis U.S. dollar had not really affected the prospects of exporters in terms of payments, he said. The Russian market is expected to continue in the same mode for at least a month or two before the prices stabilise, Mr. Sathappan told The Hindu .
According to M.P. Devaiah, general manager of Allanasons Ltd., one of the top five exporters, weakening of rouble has created a flutter in the Russian market mostly with regard to instant coffee. His company does not have to rue much about the Russian crisis as it is into green beans exports rather than instant coffee. Some exporters of instant coffee also feel that thanks to the long-term contracts with Russia, their business prospects might not take a hit.
Admitting that the rouble crisis has affected the instant coffee exports, the former Vice-Chairman of the Coffee Board and progressive grower Bose Mandanna said growers may not face the brunt as they are not directly involved with export of the commodity. Even, there may not be much coffee left at the hands of the exporters at the end of the year. Arabica coffee production was drastically down as it was the worst hit due to white stem borer infestation as also natural vagaries, Mr. Mandanna said.
