Coffee exports on course but output may fall

Coffee exports on course but output may fall

Kochi: Coffee exports from India have touched 124,000 tonnes in the first seven months of this fiscal, which is more than half of the 205,000- tonne target set for the year.

The government trade promotion body, Coffee Board, is hopeful of achieving the annual target. However, coffee growers said the board’s production target of 291,000 tonnes is stiff and may not be achieved. Heavy monsoon rains in several parts of Karnataka and Kerala appear to have badly affected the crop, says Anil Bhandari, former president of the growers’ body United Planters’ Association of South India and vice-chairman of the Coffee Board.

Bhandari says production may be in the 260,000-tonne range this time. While the output of the Arabica variety may be in the 90,000-100,000-tonne range, he has doubts about how good the Robusta variety crop would be. Production of the Arabica variety of coffee may not suffer because the areas not affected by the heavy monsoons may produce a good crop to offset the damage experienced in other areas.

Overall, the total production may come down to the 260,000 tonnes level against the Coffee Board’s estimate of 290,000 tonnes. Bhandari adds that the board is likely to revise the figure downwards sometime next month, based on its post-monsoon estimates. Indian coffee production has been stagnant in the 270,000-280,000-tonne range for the last few years and productivity has declined to 860kg per hectare, from around 950kg a decade ago.

G.V. Krishna Rau, chairman of the Coffee Board, attributes this to the senility of the plants across 80,000 hectares in the coffee-growing states of Karnataka, Kerala and Tamil Nadu and, therefore, the board is expected to initiate a massive replantation programme in these areas from next year

Bhandari says the industry is closely watching crop arrivals from Brazil, the world’s largest coffee producer, where the coffee flowering has just started after a spell of drought for three months since  August.

Though there have been reports of scanty rainfall in Brazil, there is a general feeling that the crop there will be less than 2 million tonnes (mt), against an estimated 2.2mt.

The lower crop will decide the future of the supply position in the global coffee market, since a shrinkage in crop production will see prices appreciate, he adds. Arabica prices in the auctions in India now range between Rs114 and Rs80 a kg, depending on the quality, while Robusta prices are in the Rs77-73 range.

Compared with the export of 249,000 tonnes during 2006-07, the target has been lowered to 205,000 tonnes for this year. Rau is confident of achieving the annual target despite a marginal fall in shipments till date. Exports are expected to pick up in the months ahead, he said recently at the meeting of Karnataka Planters Association in Bangalore.

Due to expectation of a higher price, coupled with the heavy monsoons, which has been  unfavourable to taking the coffee beans out from the warehouses, growers were not releasing their stocks, creating a shortage in the market.