IICF highlights Indias role in global coffee economy

Written by Jaishankar Jayaramiah | Bangalore | Updated: Oct 12 2009, 05:58am hrs
The India International Coffee Festival 2009 (IICF 2009), a three-day global coffee expo held in Bangalore, has underscored the fact that India will play a major role in the world coffee economy in the years to come.

Currently, India's share in the world coffee production stands at a meagre 4%, but expanding domestic market would change the world coffee market ratio, said global experts in the IICF. At the same time, they also stressed the urgency to increase productivity and curtail ill effects of climate change on Indian coffee plantation.

Nestor Osorio, executive director of London-based International Coffee Organisation (ICO), the apex body of the global coffee industry, said the country is witnessing a new trend with growing coffee chain business. If this trend continues, he said the consumption would double to 3 million bags in the next 5-10 years from the current level of 1.5 million bags. According to Osorio, the world coffee consumption is expected to touch 140-145 million bags by 2020 from 130 million bags at present, an increase of 10-15 million bags, of which a sizeable portion of 1.5 million bags or 10-15% would be contributed by India.

In fact, coffee consumption in India remained stagnant in 1990s. But, it grew faster in the past five years registering an annual growth of 6% after GV Krishna Rau took charge as the chairman of government-owned Coffee Board in May 2005. Rau, who is a geologist-turned-IAS, said the coffee industry should take a serious note on climate change that has affected the Indian coffee industry in recent years. Although Karnataka is the most productive coffee region with a contribution of 70% to the country's production, ecologically it is the most fragile region, he added.

Coffee growing patterns in many parts of India have witnessed change in the past 30 years due to reduction in shade trees. He said some coffee growing areas have seen rise in temperature by 4 degrees.

Responding to this, Osorio said impact due to climate change, primarily in tropical countries including India, would be discussed in the World Coffee Conference in February 2010 in Guatemala.

Carlos Brando, a global coffee consultant who was responsible for Brazil tripling the domestic consumption over a ten-year period, said the countries like India, Brazil, Mexico, Costa Rica, Columbia and El Salvador have taken steps to increase their domestic markets. India is now showing the fastest rate of progress. It may be noted that the Coffee Board roped in Brando as its consultant in 2006-07 when it chalked out strategies to improve coffee consumption in India .

With cafs growing at annual rate of 30%, speakers at IICF said production should also match local demand. Five years ago, India used to export around 80% of its total coffee production while 20% was utilised for domestic purpose. But, currently 67% of the production is exported while the rest is consumed domestically.