Domestic coffee exporters and planters are increasingly seeking eco-friendly certification from international certifying bodies like UTZ, Rainforest and Fairtrade in their bid to get higher premium over competing produce in the international market as well as a premium over prices.
According to estimates, this crop year alone is expected to see an addition of around 10 per cent to the present certifying area of 50,000 acres in the country.
“International certification from organisations like UTZ, Rainforest or Fairtrade gives an eco-friendly tag to the coffee. So, exporters are able to fetch premium over international prices,” Sahadev Balakrishna, chairman of Karnataka Planters’ Association said.
He, also, said that even individual coffee estates from major growing regions of Coorg and Chikmagalur were seeking such certification.
UTZ, Rainforest, Fairtrade among others are the international certifying agencies, which certify an estate on the basis of good agricultural and business practices, social criteria and environmental parameters.
Such certified coffee, in turn, fetches higher premium over competing produce from other nations and over current international prices. “While premiums are low at the time of high prices in international futures, it is usually higher by 20-30 per cent over competing produce from Brazil and Vietnam,” Balakrishna said.
He, however, said certification was done for getting long-term dividend as organisational rules, sound crop practices, efficient use of natural resources became a part of the coffee production process.
Usually, Indian arabica gets a 20-30 per cent higher price over Brazilian produce and robusta gets a 30-40 per cent higher price than Vietnamese coffee. So, certification will further help domestic coffee to get a higher premium than usual rates.
Some export houses are of the opinion that international certification will help domestic planters to get right price at the time of crisis in the international market. “While prices are high, certified coffee may not give planters a distinct price advantage, but it will definitely of help during crisis period,” a top official of Ned Commodities said.
He, also said, international certification process was still in an infant stage in India and should catch up fast to meet international standards. Ned Commodities is one of the largest coffee exporter of India and it facilitates the process of certification for small planters.
About certification by small planters, he said small planters were certified under ‘group certification scheme’ to reduce cost of certification.
Referring to this matter, Jabir Asghar, vice-president of Coffee Board of India said, “ Coffee Board is trying to push certification of Indian coffee as it is classified under premium coffee and fetch higher price. However, this process is in an initial stage.” He, also, said that Coffee Board had no plans to come up with any new schemes for facilitating certification process.
