The export target has been pegged lower in view of a downtrend in shipments of these two commodities since the beginning of this year, the sources said. The target for tea exports has been lowered to Rs 523 crore for the current financial year against last fiscal exports of Rs 547.19 crore.

For coffee, the export target target has been fixed lower at Rs 400 crore from Rs 404.80 crore last year. During the last fiscal, coffee exports value had slid by 11.29 per cent, while that of tea increased by 8.38 per cent. As a result, these commodities exports had slid to Rs 952.04 crore against Rs 961.24 crore in 1997-98.

India's coffee exports have been hit this year by low global prices for the commodity caused by the steep decline in the Brazilian real value against the US dollar.

Coffee prices havebeen ruling low since then and have shown little sign of recovering.

In view of the lower global prices, importers have tended to prefer Brazilian unwashed arabicas to Indian washed arabicas, while of late robusta coffee exports, too, have begun to decline.

On the other hand, tea exports have also witnessed a decline since the beginning of the year.

From January to May this year, tea exports have slid by 17 per cent to 57.17 million kg from 68.59 million kg during the same period last year.

Exports have mainly slid on poor offtake by Russia, which accounts for nearly 50 per cent of India's total tea exports.

The economic crisis in Russia has been cited as a main reason for the decline in Russian offtake.

The recovery staged by Kenya in production has also to an extent affected India's export prospects. During the last financial year, India exported nearly 205 million kg of tea fetching record foreign exchange earnings.Apart from lower exports, Indian tea industry has also been hit by lowerproduction during the first five months due to a dry spell in the north-eastern region.