Coffee Board pegs crop loss due to rains in South India at 82,000 tonnes

The board has asked the govt to consider a special package for the coffee growers' fraternity

The Coffee Board, under the Ministry of Commerce, has estimated a crop loss of around 82,000 tonnes due to heavy rains in the traditional coffee tracts across South India. Industry representatives, however, believe that these losses may not affect prices -- which are decided on the basis of international demand and supply -- as global supply is already more than the demand at present. 

Officials in the Board have said it would be difficult to achieve the post-blossom estimate of 350,400 MT for 2018-19, unless the upcoming season in December sees a huge spike in cultivation. The final crop estimate based on crop harvest data for the year 2017-18 is placed at 316,000 MT, of which 95,000 MT is Arabica and 221,000 MT Robusta.

According to the Coffee Board, among the southern states of Karnataka, Kerala and Tamil Nadu, the crop loss is highest in Karnataka followed by Kerala and Tamil Nadu.

In addition to the crop loss, severe landslides have been reported in Kodagu, Karnataka, affecting about 1500ha of coffee area. Some minor landslides have been reported in other parts of Karnataka and Kerala as well.

Coffee Board officials say the loss could be higher in Robusta since the rainfall was more across plantation areas of this variety.

The Coffee Board says unlike other agricultural crops, coffee requires intensive cultivation and huge financial investments to maintain the plantations. The absence of required financial assistance is a deterrent for the maintenance of coffee plantations.

The growers' associations have been requesting to consider waiver of interest on coffee loans, re-scheduling of outstanding loans and reduction in the interest rate for coffee loans to three per cent for loans up to Rs 2.5 million and six per cent for more than Rs 2.5 million in view of the prevailing conditions of severe calamity. The demands of growers' associations are justified considering the unprecedented difficulty faced by the growers, said the Board.

“Coffee Board believes that the compensation paid under the Calamity Relief Fund through the concerned state governments under the National Disaster Management Plan will not be sufficient to recoup the losses that have occurred due to continuous unprecedented rains during the current South-West monsoon season. Hence, a special package may please be considered for the coffee growers' fraternity by Government of India,” said the Board.

Prices of Arabica continue to be stagnated at $98.95 cents per lb at Intercontinental Exchange (ICE), the company that owns the New York Stock Exchange. At London International Financial Futures and Options Exchange (LIFFE) Robusta prices dropped to $1,606 from $1,621 a tonne. While Robusta prices are expected to drop further to $1522 in November and o touch $1,518 by January 2019, prices of Arabica may pick up in December to $102.65 and further to touch $106 by March next year.