Tough time ahead for coffee planters

Coffee producers are finding it tough with the constant fall in the global prices. The International Coffee Organisation's (ICO) composite indicator price, which had remained above 150 cents per lb in the 1980s, has come down in recent months.

A recent study, jointly sponsored by the ICO and the European Commission, pointed out that only a few coffee producers across the world could recoup their operating costs, let alone the total cost.

In India, coffee growers using traditional production system showed losses.

According to the data released at the last international conference on coffee science, organised by the Indian Coffee Board, the total value of exports of all forms of coffee in 2003 was estimated to be around $9.58 billion.

This comprised shipments of 85.79 million bags worth $5.58 billion and re-exports of 27.49 million bags by importing countries amounting to $4 billion.

Recent data indicates a reduction in global production, perhaps to negate the excess supply that is the cause of the falling price. Global production was 100.69 million bags in 2003-04, down by around 18 per cent fall from 121.94 million bags in 2002-03.

The production is estimated to fall further to around 112-114 million bags in 2004-05, according to international agencies.

Despite the low coffee prices and the cut in retail prices in some importing countries, demand has remained static.