Demand up 42% in 6 yrs in non-South states; export pattern sees change

Traditionally coffee is known as a south Indian drink, but growing demand for coffee in non-southern states over the past few years has started pushing up overall coffee consumption in the country.

Between 2003 and 2009, India?s annual consumption grew by staggering 42% in non-southern states while the same rose by 3.5% in the southern states. Southern states comprising Tamil Nadu, Kerala, Andhra Pradesh and Karnataka share nearly 78% of the total coffee consumed in the country while coffee consumption in other parts of the country is also catching up.

Coffee consumption has been shooting up in states like Maharashtra and even National Capital Region (NCR) of Delhi in the last few months.

Experts believe that proliferation of retail coffee chains up north seems to have done the trick.

According to statistics released by International Coffee Organization (ICO), consumption in India has been steadily increasing in the past five years, thanks to the beverage?s popularity in the North.

The domestic consumption increased to 1.57 million bags (60 kg per bag) in 2009 from 1.35 million bags in 2006. Coffee consumption in India increased on the back of the state-owned Coffee Board taking steps to develop the domestic market to support coffee farmers in the country.

Generally 80% of coffee produced in India is exported and only 20% is consumed locally. This ratio has been changing slowly on account of rising domestic consumption.

Citing a coffee consumption survey, Coffee Board chairman Jawaid Aktar said the total coffee consumption in India during 2009 touched 1.02 lakh tonne with an urban and rural division of 73% and 27%, respectively.

Interestingly, instant coffee accounts for 57% of total coffee consumed in India , while the remaining 43% is shared between roast and ground (filter) coffee.

In urban areas drinking of instant and filter coffee is in the proportion of 61:30 while in rural areas 46:54.

Consumption in non-south areas has largely been of instant coffee. Penetration of coffee (beverage consumed in the past 12 months) is at 92% as compared to 59% in 2003, indicating that people have started experimenting with this beverage in the past few years, the Coffee Board chairman added. Non-south of the country has been identified as potential area to increase the consumption growth in the future, he said.

Erratic rains, pest attack may pull down output to below estimate

India?s coffee production is likely to fall below the ?post blossom? estimates of the state-run Coffee Board due to erratic rains and pest attacks, trade sources said.

Estate owners said the pest attack is particularly severe this year mainly of white stem borer which may drag down Arabica output during the current crop year which started in October 2010. The berry borer attack in Robusta plantations is also widely seen this season due to change in weather condition.

Talking to FE, Karnataka Planters Association (KPA) chairman K M Nanaiah said unseasonal rains in December 2009 led to excess vegetative growth in Arabica and Robusta, which is not good for the plantation.

Further early blossom showers in February will have an adverse effect on Arabica. The Arabica plantation should witness blossom showers only during March-April period. Because of early blossom showers, the fruits started ripening fast forcing for early picking of coffee. Generally Arabica harvest starts from third week of November. But this season, farmers have started harvesting from the beginning October itself which should increase labour cost when farmers complete their Arabica and Robusta harvesting in May, planters said.

Adding to their woes, heavy rains started lashing from September this year which is still continuing in coffee plantation stretch in Karnataka.

?This seasonal change is expected to reduce Arabica output this year,? Nanaiah added. ?The Arabica production may be higher than last year but it will be lower than the Coffee Board?s post blossom estimation,? he said. The extent of shortfall can be known when the board release its post monsoon estimation in the third week of November.

Coffee Board prepares two estimates every crop year. Generally the first one is published after the blossoming of the crop in March-April and another in October-November after the monsoon.

Nishant R Gurjer, managing partner of Sethuraman Estate in Chikamagalur, said Arabica output is likely to be down by 10-15% compared to the post blossom estimates of the Coffee Board.

In its post blossom estimates released in the middle of this year, the Coffee Board projected a total coffee output of 3.08 lakh tonne that include 2.08 lakh tonne of Robusta and 99,500 of Arabica.

Last year India?s total coffee production stood at 2.89 lakh tonne. According to board?s projection, Karnataka?s coffee production will rise to 2.10 lakh tonne this year, up from 2.05 lakh tonne last year. Karnataka accounts for 70% of the country?s total coffee production. Kerala?s production will stand at 65,775 tonne, up from 59,250 tonne recorded a year ago.