World coffee output seen up 0.5%

World coffee production is projected to grow annually by 0.5 per cent, marginally outpacing the anticipated consumption growth of 0.4 per cent, in the current decade (1998-2000 to 2010).

As a result, the global production and consumption will almost be in balance at around seven million tonne by 2010.

The annual growth of coffee output in India is reckoned at 3.1 per cent, far higher than the average 2.1 per cent growth in the Asian coffee producing countries as a whole.

These projections have been made by the Untied Nations Food and Agriculture Organisation (FAO) in its report on agricultural commodity projections for 2010.

It has used a dynamic model for this purpose which takes into account supply, demand and stock functions and other relevant factors like global and domestic prices in major exporting and importing countries.

The study has treated coffee as a homogenous commodity without any distinction between Arabica and Robusta varieties. The report points to several major changes in the global coffee scenario by 2010. Most production growth is projected to come from Asia and Africa, instead of Latin America which has so far been the major coffee producing region.

Besides, the growth of consumption would be faster in developing countries than in the developed countries, contrasting the trend over the previous decade when it was the other way round.

Part of the growth in consumption in the developing countries is anticipated to come from increase in demand within the producing countries and part because of deceleration in international trade.

However, the recent global price crisis in coffee has adversely and affected the incomes of all coffee producers though it has hit some producers more severely than others due to the difference in various economic factors, such as production cost and exchange rates.

"This variation may change the relative competitiveness among the exporters and, therefore, could alter the pattern of the world coffee trade", the report cautions.

The study indicates that the world's largest coffee producing region is likely to continue to be Latin America and the Caribbean though the annual growth rate in the region may decrease from 1.7 per cent annually in the 1990s to mere 0.4 per cent in the current decade.

In Asia, Indian coffee output is projected to rise annually by 3.1 per cent to reach 409000 tonne (7.0 million bags) by 2010. Indonesia is also likely to register a robust output growth of 2.1 per cent to reach 1.7 million tonne (29 million bags) by the decade-end.

In Africa, too, coffee output is projected to rise by 1.5 per cent annually due largely to yield enhancement rather than area expansion.

Global coffee consumption, on the other hand, is projected to grow at the rate of 0.4 per cent annually to touch 6.9 million tonne (117 million bags) in 2010.