Coffee Board statistics, revealed that coffee export from 1st January to 8th February has declined to a meagre 809 tonnes from 12,106 tonnes compared to the same period of last year.

There has been drastic reduction in the number of licences given for shipments. Licences given to ship 12,799 tonnesis almost 25 per cent less compared to permit given to export 16,594 tonnes during the same period last year.

According to exporters low prices for Indian coffee is the reason for the slump in exports. The low prices are forcing farmers to hold their produce as they have the capacity to withhold stocks,they said.

The decline in Brazilian real value has created a big problem for Indian coffee exporters. Brazil is dumping coffee in the global market and Indian prices have lost their edge, Coffee Futures Exchange of India (COFEI) limited Chairman and leading exporter Ashwin Shah opined.

The fall in exports has come at a time when Coffee Board's data show a very low carryover stocks of 7,280 tonnes for 1999 after its exports registered a record two lakh tonnes in 1998.

The Brazilian real has slid drastically against the U.S.Dollar and by the beginning of February, it declined by 42 per cent to beneath 50 cents against the dollar.

The real has been on the slide ever since the Fernando Henrique Cardoso government scrapped its controlled real exchange rate on January 13.

The fall in brazilian real has led to over-selling by Brazilian farmers, coffee broker sources said. The prices were very low and technically it was not workable for Indian exporters, they said. Shah said Brazil loaded surplus coffee continued to flood the market with its produce.

"The market is absolutely dead for us. Whatever is beingbought is in the domestic market and some of it is for stock building," he said.

Export of washed arabicas has been primarily hit by the decline in real value as India was not getting any export order. The fall in Brazilian real had led to its growers realising higher prices, by over 30 per cent, for their coffee in international market.

The low-prices unwashed arabicas were in fact hurting prospects for Indian washed arabicas.

Shah said the chance now for India to attain its coffee export target was bleak. The business is 50 per cent lower than normal at this juncture, he said.

The sources said the situation would improve only after the real value stabilised against the U.S. Dollar.He also said chances of prices rebounding, especially in Indian market, were bleak.

Even the proposed export tax by Brazil on coffee would not help improve matters for India, exporters felt.

Coffee board sources said the fall in coffee prices was restricted only to the arabica variety. Robusta prices have not fallen drastically, though theirprices were also lower, they said. Although Indonesia was also dumping its robustas in the international market much to the chagrin of Indian exporters.

India's annual coffee production makes up 3-4 per cent of total global production and it exports two-thirds of the coffee produced in the country.

During 1998-99 season (October-September), India coffee production is estimated to be a record 2.33 lakh tonnes against 2.30 lakh tonnes the previous season.