Ramesh Exports Ltd managing director Ramesh P Rajah told The Financial Express that exports had come to a stop as traders were unwilling to sell their produce at the level of prices offered in the international market.

He said the domestic market was showing a price difference between 5 to 8 per cent (above world market) for Arabica and Robusta varieties. He said discounting on Indian coffee was introduced due to poor quality besides over-production in all coffee origins.

He said the price disparity would continue till the fresh crop hit the market by the end of November. Madhu Jayanti International director Ashwin Shah said, ``By the arrival of new crops, the market will attain parity in prices.''

Allana &Sons Ltd general manager Nallamuthu said the price disparity would be the major reason for the numbness in the country's coffee export front. At the ICTA auction, Plantation A was sold at $1900 per tonne as against the international buying rate of $1700 thus making a price difference of $200. Robusta was sold at $1480 per tonne as against the export market rate of $1380, a variation of $100, he said.

``Under a situation like this, which trader will want to export his coffee when he is assured a better price domestically,'' Nallamuthu wondered.

He said,``Though all coffee origins face discounting, Indian coffee is highly discounted in the international market by 15 cents per pounds. Many times, Indian traders fail to match quality assured at the futures trading while delivering the stock.''

Karnataka Coffee Brokers Pvt Ltd managing director B Arun Biddappa disagreed on heavy discounting on Indian coffee in the world market and said that there was a difference of 2 to 3 per cent between domestic andinternational coffee prices. But no special discounting was introduced on Indian coffee while coffee from Kenya and Columbia fetched a premium.

On the country's coffee exports, he said the export quantity was not encouraging and farmers and traders tended to hoard. Currently, there is a coffee inventory (last year's crop) of over 40,000 tonnes (mostly of Robusta). The stockpile would be cleared in a month's time, he said.

On the quality of Indian coffee, he said, ``The practices of selling something and shipping out something else will not help the country sustain in the international market. There are bad eggs in the market.''

On the impact of rains on the coming coffee crop, he said, ``Rains may not affect the crop much, it will only push out weak berries from the plant. But if it continues beyond August it might cause berry dropping.''

According to the Coffee Futures Exchange of India (Cofei) business manager Narayan Bhat said exports have come to a virtual stop. ``Currently, Cofei trades only onthe existing commitments and fresh contracts are very few. Once the price parity is established, trading at Cofei will return to normal,'' he said.

This coffee year, the country expects an all-time high crop of 3,00,000 tonnes. However, what would remain on the bush in September would be the actual size of the crop. While exports have been frozen by traders for now, they will eventually have to clear the stocks for whatever realisation they can manage to get before the next season commences in November.