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Coffee exports likely to cross Rs20,000 mn by 2010

Coffee exports likely to cross Rs20,000 mn by 2010
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First Published: Wed, Aug 15 2007. 03 29 PM IST
Updated: Wed, Aug 15 2007. 03 29 PM IST
New Delhi: India’s earnings through coffee exports are likely to rise to Rs20,000 million by 2010 from current level of Rs16,500 million with its quantity exceeding about 5 lakh tonnes from current level of 3.3 lakh tonnes.
This is because domestic coffee producers would be laying higher emphasis on exports on account of favourable realization on international coffee prices.
The above forecasts have been made by Assocham based on an exhaustive study carried out on the future of coffee exports. They predict that more than 80% of domestic coffee production would be out for exports as India is likely to witness a moderate growth in its coffee consumption in the coming years.
Total permits issued by Coffee Board of India for export purposes in 2006-07 are about 2,21,000 tonnes against 171,262 tonnes in 2005-06. Their number would go up by at least 7-8 times particularly when emphasis on coffee exports would be very high in view of its rising demand from countries like Italy, Russian Federation and Germany. Even Belgium is emerging as one of the largest importers of Indian coffee.
These countries dependence on coffee exports from India would keep rising because of price factor and guaranteed assured supplies from states like Karnataka, Kerala and Tamil Nadu.
The study points out that in 2007-08, total coffee production from Karnataka alone could go up around 206.025 metric tonne against about 59475 metric tonne of Kerala and 18225 metric tonne of Tamil Nadu.
Coffee production of Karnataka would grow by 10 times by 2010 as the state’s farmers would be sowing coffee plants in larger acreage’s and the same would be case in Kerala and Tamil Nadu as these three states would still maintain their lead in coffee production three years later.
Steps to boost coffee production
* Push up transparency level for 100% coffee so that coffee growers realization from domestic coffee sales also grows.
*Coffee board should put enough pressure on financial institutions particularly within states so that farmers’ coffee holdings grow at larger scale.
According to estimates out of 178,308 coffee holdings nearly 28,000 are not in a position to repay bank loans. Union government with Ministry of Commerce should come out with a package for granting interest free loans to increase coffee holdings,at least till they can pay off their debts.
* Farmers should be encouraged to grow organic coffee and coffee beans as it will command much higher price with lower acreage, benefit of which will accrue to coffee growers only.
Coffee prices
Average coffee price in 2005 for plantation A, Arabica Cherry AB and Robusta Cherry AB was Rs103,79, Rs85.33 and Rs53.36 per kg, showing an increase of 55%, 57.6% and 51% respectively.
Though there has been an increase in prices since 2003, prices have not reached the peak level which was achieved in 1997-98. Also, many of the Arabica growers have been facing huge crop losses due to the infestation of white stem borer.
The global production of coffee for the crop year 2007-08 could go up to over 200 million bags compared to 125 million bags in 2006-07. Also global coffee production would be around 600 million bags in view of rising coffee demand across the world on health grounds.
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First Published: Wed, Aug 15 2007. 03 29 PM IST