Despite a downward revision of production in its post-monsoon estimate, the Coffee Board is bullish about exports from the country in the current financial year. The board also expects international future prices to rise, especially of the arabica variety, due to the ongoing supply constraints. Coffee Board of India Chairman Jawaid Akhtar spoke to Debasis Mohapatra on underlying challenges and upcoming opportunities for the sector. Edited excerpts:
What is your expectation of coffee exports, given the board’s recent downward revision of production for the current crop year?
The Coffee Board has marginally revised the production estimate for the current crop season due to untimely rain in November. We estimated production of 299,000 tonnes in our post-monsoon session, which is just 2.9 per cent down compared to the previous estimate of 308,000 tonnes. Despite the revision, export demand remains strong and we expect it to exceed our previous targets.
While we exported around 208,000 tonnes of coffee during the last financial year, we have already exported 210,000 tonnes so far this year. In value terms, we should achieve $600 million (Rs 2,700 crore) by the end of the current financial year.
How do you see pricing of arabica and robusta in the international market?
Pricing will depend on availability. As of now, arabica has been hit in India due to unseasonal rain in November. Rain has also affected production in Brazil. So, I expect good prices for the variety in the coming days. As far as robusta is concerned, prices are likely to stabilise at the current level.
How do you see the domestic demand panning out?
Domestic demand has seen a steady upward trend in the current decade. It rose at a compounded annual rate of 2.5 per cent per annum during 1990-2000, while in 2000-2010, the growth rate has been six per cent per annum.
Will India be a net importer of coffee in the coming decade due to a spurt in domestic consumption?
No, that is not likely to happen in the coming decade. Though domestic consumption is sound, production will also increase. The Coffee Board is taking all possible steps to increase acreage. Andhra Pradesh and Orissa have shown promising possibilities in this regard.
But, productivity level in India remains low compared to counterparts in Vietnam and Brazil.
Indian conditions are very difficult for coffee production. Factors like high temperature, long-spell of rainfall, followed by a dry season, must be taken into account before considering productivity. Also, coffee is mostly grown as a mixed crop in the country. So, coffee productivity should be calculated after factoring in productivity of other crops.
