COONOOR: Indian coffee planters have never had it so good as their aromatic beans continue to fetch higher prices, with the slump having marginal impact on the consumption of the brew.
“Indian coffee prices will remain high globally as its consumption is growing at 5% pa and global stocks remain at the lowest,” state-run Coffee Board director Y Raghuramulu said on the sidelines of a planters’ conference here. With global coffee consumption growing at 2 million bags per annum, demand for Arabica and Robusta varieties from India is set to increase because of its quality, aroma and competitive pricing.
World coffee consumption is estimated to be around 129 million bags of 60 kg each in 2009 as against 128 million bags in 2008. Consumption in producing countries like India is one-third of the production. Though 75% of the coffee produced in India is exported, the stagnant domestic market, mostly in southern India, is set to grow at 5% annually by 2011 due to demographic dividend, disposable income, change in consumption patterns and expansion of coffee chains at retail levels across metros and cities.
“The Indian coffee sector stood the onslaught of great price depression for four fiscal years (’01-02 to ’04-05), drought and pest outbreak. The growing image of our quality, especially for Robusta, has enabled the sector to be resilient and bounce back,” Raghuramulu pointed out.
According to the International Coffee Organisation (ICO), the price of India-grown Arabica shot up to Rs 135 per kg in fiscal 2007-08 from Rs 77.50 per kg in fiscal 2004-05 and the price of Robusta increased to Rs 70 per kg from Rs 31.90 in the same period at international auctions.
At auctions conducted by the Indian Coffee Trade Association (ICTA) in Bangalore, Arabica (Plantation A) price soared by 36% to Rs 180 per kg in the first nine months (January-August) of 2009 from Rs 132 per kg in the same period of 2008, while the price declined by 13% in Robusta Cherry to Rs 83 per kg in the first nine months of 2009 from Rs 95 per kg in the same period of 2008.
In spite of a 10.3% decline in export quantity to 196,530 tonnes in fiscal 2008-09 from 218,996 tonnes in 2007-08, value realisation increased by 9.2% to Rs 2,235 crore from Rs 2,046 crore in the same period, as unit value went up by 22% to Rs 114 per kg in fiscal 2009 from Rs 94 per kg in fiscal 2008.
In the first quarter (April-June) of FY2009, export quantity declined by 15% to 50,305 tonnes from 59,072 tonnes in the same quarter of 2008, resulting in 17% decrease in value realisation to Rs 542 crore from Rs 649 crore despite marginal drop in unit value to Rs 108 per kg from Rs 110 per kg in the same period.
“Indian coffee has become the flavour of the season in the matured markets such as Europe, Russia, Japan and the US (for speciality coffee) despite increasing competition from new entrants like Vietnam and Indonesia,” Mr Raghuramulu said.
Arabica (Plantation A) price appreciated by 17% to Rs 132 per kg in 2008 from Rs 113 per kg in 2007, while Robusta price shot up by 28% to Rs 97 per kg from Rs 76 per kg in the same period.
Karnataka accounted for 70% (183,860 tonnes) of the coffee production (262,300 tonnes) in the country during fiscal 2008-09. With Kerala contributing 22% (57,200 tonnes) and Tamil Nadu chipping in with 6.2% (16,255 tonnes), southern India accounted for 98% (257,315 tonnes) of the total output last fiscal. India’s share of global production and exports is a mere 3.5%.
Source : The Economic Times