On the first day of Coffee Futures Exchange India Ltd's (Cofei) operation, the number of participants, who attended the trading operations, was more than 100. But this has since started trickling down, with the number of active participants coming down to 20 to 30 at present.

The reaction from the growers' community is way below expectations, thanks to the falling prices in international coffee markets. Many of them are just learning the ropes, said Ramesh Rajah of Rajah Enterprises, a leading coffee exporter in Bangalore.

According to Rajah, who is also one of the directors of Cofei, it will take some more time to propel volumes at the coffee exchange as growers adopt a wait and watch approach.

The dismal response comes at a time when the country is aiming for a 20 per cent growth in exports. Coffee exports last fiscal had gone down comparedwith the previous fiscal.

Cofei chairman Ashwin Shah has, however, a different story to tell, "The volumes at the coffee futures are on par with developments in the international market.

Since the volume of coffee production in the country and the related exports is less than 5 per cent of the total production worldwide, we should not expect a high volume in a single day. Volume and prices at the New York and London exchanges in the last few days are very low compared to this time last year."

A section of exporters said the price drop in London is causing anxiety. There are not many buyers in contract market and the bourse is yet to start the spot market deliveries.

In the last few days, the average price quoted at Cofei for plantation A is Rs 95 to 98 per kg and Rs 70-73 for robusta cherry AB for September 98 contract. For November 98 contract plantation A was quoted in the range of Rs 96-99 per kg and robusta cherry AB at Rs 70-73.

The volume traded was around 30 lots of 60 kg bags. Shah said theresponse from coffee players is very encouraging. Denying the charge that the exposure of coffee growers from neighbouring states like Tamil Nadu and Kerala to the exchange is too low, he said, "We have good demand from all regions as this is futures market. The present picture of tightness will begin to reverse with the arrival of the new crops within the next few months."

To further increase the response, the coffee futures exchange is also conducting trial runs especially for those who did not attend the mock trading earlier. Cofei's last board meeting had emphasised the need for conducting a refresher programme on futures trading for the coffee community in the country. The board had also organised a mock trading on the same day, said senior Cofei officials.

Coffee experts said the production of Brazilian coffee this fiscal will have a negative impact on Asian coffee prices.

Brazilian 1998-99 coffee output has been pegged at 35.8 million bags (of 60 kg each), up from a revised 23.5 million bags inthe previous year. Last week, coffee trade in Vietnam was also slow with buyers getting fresh beans from Indonesia while local farmers held back the stock waiting for better prices.

Uncertainty over the availability of containers in coming months and loading and unloading problems at Chennai port also have forced the traders in the country not to acquire more stocks at this point of time, in addition to the falling prices abroad, said senior officials with Allanasons, a leading export house in Bangalore.