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Production and export performance of coffee--an anatomy.

Introduction

Coffee is an important beverage in India, especially to South Indians. In Tamilnadu, the day breaks with a cup of coffee every day. It is more than so in USA and few foreign countries. Coffee has taken a dimension of being any time drink anywhere in the world today. There is a legend about coffee that a Muslim saint from India, Baba Budan Yemen around 1600 AD on his return from a pilgrimage to the holy land, planted these seeds around his mountain hut in Chicmagalure in Karnataka in South India. Descendents of these early plants are believed standing in Courg, Mysore and Nilgiris.

Commercial coffee production in India began more than 150 years ago, when the British established plantation throughout south India. They found the tropical climate, high altitude, severely slopes, ample rainfall, soil rich in humus content and well-drained sub-soil ideal for coffee cultivation. Since then, India has been a consistent producer and exporter of high quality coffee. Most of India's export goes to Western Europe and Japan.

India produced both Arabica and Robusta Coffee. Arabica grown at elevation between 3000 and 6000 feet where as Robusta is grown at lower elevation. The last five years coffee production data ranks India 9th in terms of total tone, approximately the same level of Ethiopia, Uganda and Guatemala.

The International Coffee Organization (IOC) categorizes India's production under other "Mild Arabica". Most of the coffee is grown in three states of Karnataka, Tamilnadu and Kerala. Karnataka state accounts for nearby 65 percent of total production, where as Tamilnadu contributes 15 percent and Kerala 20 percent approximately. The traditional coffee growing parts in India are Anamalis, Bababudan, Nilgiris, Coorg, Mysore, Chicmagalur, Palani hills (Dindugul) and also Shervaroys.

Coffee Varieties

The two varieties of coffee are Arabica and Robusta. The former constitutes the high quality blends producing superior taste, aroma and flavour and the latter is the low quality and cheaper blends resulting in a bitter brew, with a musty flavour and less body. Because of this, quality coffees consist of cent percent Arabic beans.

Specialty coffees are high quality coffees that differ from normal coffee with relevance to visual quality. These coffees are popular in the global markets. There are five specialty coffees; decaffeinated coffee, organic coffees, high grown coffees, estate coffee (single origin coffee) and variety coffee.

Some of the Indian selections like Kents, Agaro, Cioccie, CxR are unique in their cup quality. Separate processing of these varieties help in processing their intrinsic quality. India is framed for its Monsooned Malabar variety which is known for the monsooned flavour mellow taste and golden look. Consumers in Scandinavain countries love it for its special colour and flavour. The main grades of this variety are Monsooned Malabar AA, Monsooned Basanally, Monsooned Robusta AA. Another well-known variety is the Mysore Nuggets Extra bold. Others include Arabic plantation coffee (washed Coffee) grown in the Mysore, Coorg, Biligiris and Shervroys regions. The Robu kappi Royal is prepared from Rousta parchment AB from the region of Mysore, Coorg, Wynad, Shervaroys, Pulneys and Bababudans.

Post blossom coffee crop forecast for the year 2009-10

The post blossom crop forecast of the year 2009-10 is place at 306750 MT, which is an increase of 13300 Mt (4.54 percent) over the previous 2008-09 season's post blossom estimate of 293000 MT.

The Arabica and robusta break up is 101975 MT and 204775 MT respectively, Arabica production forecast to be higher by 1525 MT(1.53 percent) and robusta production by 11775 MT (6.10 percent) over the post blossom forecast of 2008-09, 293000 MT.

By the states, the gain has mainly come from Karnataka to an extent of 7305 MT followed by Tamil Nadu 2925 Mt, Kerala 2350 MT and Non Traditional Areas 720 Mt.

In Karnataka compared to the previous post blossom estimate, the increase in production has come from the districts Chimkmagalur and Kodagu with 5.92 percent (4250 MT) and 3.15 percent 3605 MT), while in Hassan there was a marginal decline of 550 MT(-1.96). The major zones which have shown increase are, Giris (14.51 percent), Balehonur (13.79 percent), Chinkmagalur (11.63) and Koppa (10.21 percent) zones of Chimagalur district, Napoklu (20.80 percent), Virajper (19.14 percent) and Gonikoppal (11.10 percent) zones of Kodagu district and Hanbal (18.35 percent) zone of Hassan district.

Good and well distributed rainfall during October to March helped in moisture retention for longer period which in-turn helped the production of more bearing wood for the crop during the current season. Further, the blossom and backing showers were reported to be good and adequate in almost all the coffee growing zones of Karnataka. Generally, lower crop in the previous season especially in Arabica, coupled with good weather and bush condition and better husbandry practices has helped to regain production in Karnataka zones. Accounting this, the crop forecast for Karnataka is placed at 79720 MT of Arabica and 141755 MT of Robusta totaling 221475 MT. Overall, there is 3.41 percent increase over the previous season's post blossom production in Karnataka (214170 MT) , which is due to increase in Robusta production of 6.66 percent while that of Arabica declined by 1.91 percent.

Kerala coffee zones also have received adequate and timely blossom and backing showers. As no adverse effect on crop was reported especially in coffee growing district of Wayanad and Nelliampathies though there is a marginal decline in Travancore. Accounting this the post blossom estimates for the 2009-10 is placed at 59550 MT, which is an increase of 4.11 percent over the previous 2008-09, is placed at 59550 MT, which is an increase of 4.11 over the previous 2008-2009 post blossom forecast of 57200 MT.

Similarly, Tamil Nadu had also shown an increase in crop during the current season mainly because of the biennial bearing nature of Arabica as last year was off-year. Further blossom and backing showers were reported to be normal resulting an increase in crop. Accounting this, the post blossom forecast of Tamil Nadu is placed at 19550 MT increased by 17.59 percent over the previous post blossom forecast of 16255 MT.

In Non-traditional areas of Andhra Pradesh, Orissa and North Eastern Region, the post-blossom forecast is placed at 5725 MT against previous post blossom estimate of 5005 MT. The higher forecast has come mainly from Andhra Pradesh due to increase in bearing area.

Marketing of Coffee

Coffee is sold both internally and externally. Internally sales are depending upon the consumption habit of the people, which are almost stagnant. Coffee advertised as "anytime drink" by coffee board is not popular in North India. Coffee still remains a South Indian drink, especially popular among vegetarian segments.

Domestic Market

Domestic market for coffee is very much limited, only to the tune of 80200 tonnes as per annum against the total production of about 300000 tonnes per annum. Despite various methods of domestic generic promotion and brand promotion by competing coffee dealers, the consumption does not show any great sign of increase. But coffee board targets that domestic consumption of coffee at 160000 tonnes by 2016.

Table-2 exhibits the financial year-wise production of coffee in India from 1990-91 to 2008-2009. Financial year 2000-01 produced large amount of coffee by 301200 MT. But it is very low percentage of growth as compared with the previous year production. In the year 1993-94 coffee production is high in percentage (25.15 percent) compared with previous year performance. In the year 2007-2008, recorded very lower level of performance as -9.03 percent, which is comparatively low, that of 2006-07. It is concluded from the table that there exists a slow down and rise between the years. Though the total production accounts for high, it shows the poor percentage of growth while comparing with the past performance.

The Table-3 depicts the comparison of India's sharing with World performance of production. In production-wise, India's production level got a slow down in the year 2002-03, 2003-04 and it was picked up in the year 2004-05. It shows that the 1.86 percentage of growth compared with production of 2003-04. It grows slowly by producing 5079 MT (15.54 percent) in the year 2006-07. But India's production came down in the year 2007-08 by got -18.33 percent of growth compared with 2006-07 production.

Estimated Domestic Consumption 1995 to 2008

[GRAPHIC OMITTED]

Branded coffee joints targeting mass-based consumption coffee culture in India has transformed with the springing up of comfortable coffee bars which are not just about drinking coffee but also about the creation of an entire experience. The domestic consumption of coffee is gradually increased year-by-year. In the year 1995 the domestic consumption is account of 50000 MT and the same was increased in the year 2000 as 60000 MT. In the year 2008 the domestic consumption of coffee have steady growth and accounting for 94400 MT. This evident from the Table-4 the user of coffee has increased in India level.

Export Marketing

India is a coffee exporting country right from British days since surplus production has to be necessarily marketed. It is not a choice but a compulsion. International coffee organization (ICO) played very significant role in exporting coffee from exporting countries.

Before WTO, India was a member of ICO located at London along with other coffee exporting countries like Brazil. A quota system was followed to determine the quantity of coffee to be exported by each exporting country every year. This kind of regulation was found to be convenient to some countries. While large exporting countries were always critical about it. Now ICO does not exist. No export Quota is fixed. Market with lot of fluctuations depending upon the global production, weather, political implications, etc.

Includes report for 2004-05 onwards, based n export permit)

Table-5 gives a picture of India's export performance of coffee from 1990-91 to 2008-2009. In overviews, export of coffee is gradually increased year by year. During the year 1994-95 the percentage of export is high i.e. 87.42 percent as compared with previous year. The value per tone of coffee is very low in the beginning period i. e. 1990-91 as Rs. 27858. But in 2008-09 it increased to Rs. 113, 740 per tonne of coffee. It shown the quality of production and effective use of export. Though the price per tonne is high our perforce slow and steady during the previous year i. e. 1.91 percent is increased in 2007.08 and 9.24 percent during 2008-09. In the year 2006-07 witnessed 32.94 per cent increase in export of coffee compared with 2005-06 performance i.e. 23.33 percent.

Table-6 shows that the scenario for export performance of India compared with the world export. It is evident from the table that India's export have gradually increased except the years 1994-95, 1996-97, 1998-99, 2001-02 and 2006-07. The respective years export was valued and it gives the negative growth treads 28.79 percent, 30.68 percent, 01.59 percent, 11.79 percent, 4.37 percent and 14.41 percent respectively. During the period, the unit value of per tone was heavy as Rs. 79686 for 1994-95, Rs. 80912 for 1996-97, Rs. 82727 for 199899, Rs. 49177 for 2001 -02, Rs. 50713 for 2002-03 and Rs. 80629 for 2006-07.

Conclusion

The globalization of economy opens new vistas for many agriculture products including plantation crops such as pepper, cardamom, tea and coffee. When market for these products is widely spread throught the world, the production of which are confined to very few places. Further, there is no fixed mechanism for controlling the price of these products. Various factors influence to determine the price of these internationally consumed products.

Coffee cultivation in India is confined mostly to hilly tracks of Western and Eastern ghats. In India, Kerala and Tamilnadu are the other major coffee producing states.

Coffee is a good foreign exchange earner, most of these coffee producing countries rub shoulders with each other to retain their hold in the world market. They explore all possibilities like expansion of area and innovative methods of cultivation.
Table 1: Production of Coffee in major States/districts of India

State/District Post Blossom Estimation 2009-10
 Arabica Robusta Total

Karnataka
Chikmagalur 40600 35400 76000
Kodagu 22850 95125 117975
Hassan 16720 11230 27950
Sub total 80170 141755 221925
Kerala
Wayanad -- 50250 50250
Travancore 775 6650 7425
Nelliampathis 600 1275 1875
Sub total 1375 58175 59550
Tamil Nadu
Pulneys 6900 350 7250
Nilgiris 1950 3800 5750
Shevroys (Salem) 4000 50 4050
Anamalais 2000 500 2500
(Coimbatore)
Sub total 14850 4700 19550
Non Traditional
Areas
Andhra Pradesh 5500 95 5595
and Orissa
North Eastern 80 50 130
Region
Sub total 5580 145 5725
Grand Total 101975 204775 306750
(India)

State/District Post Monsoon estimation 2008-09
 Arabic Robusta Total

Karnataka
Chikmagalur 29000 28300 57300
Kodagu 19435 86975 106410
Hassan 12700 7450 20150
Sub total 61135 122725 183860
Kerala
Wayanad 10 47500 47510
Travancore 815 7000 7815
Nelliampathis 600 1275 1875
Sub total 1425 55775 57200
Tamil Nadu
Pulneys 5245 325 5570
Nilgiris 1825 3320 5145
Shevroys (Salem) 3000 40 3040
Anamalais 2000 500 2500
(Coimbatore)
Sub total 12070 4185 16225
Non Traditional
Areas
Andhra Pradesh 4800 70 4870
and Orissa
North Eastern 70 45 115
Region
Sub total 4870 115 4985
Grand Total 79500 182800 262300
(India)

Source: Economic and Market Intelligence Unit, Coffee Board,
Bangalore 2009

Table 2: Production of Coffee in India

Year Production Total Percentage of increase or
 Arabica Robusta decrease (for total)

1990-91 78311 91415 169276 --
1991-92 88320 91680 180000 6.3
1992-93 73120 96275 1569395 -5.89
1993-94 98300 113700 212000 25.12
1994-95 79000 101100 180100 -15.05
1995-96 103250 119750 223000 23.82
1996-97 90450 114550 205000 -8.07
1997-98 99300 129000 228300 11.37
1998-99 97000 168000 265000 16.08
1999-00 119000 173000 292000 10.19
2000-01 104400 196800 301200 3.15
2001-02 121050 179550 300600 -0.19
2002-03 102125 173150 275275 -8.42
2003-04 101950 168550 270500 -1.73
2004-05 103400 172100 275500 1.85
2005-06 94000 180000 274000 -0.54
2006-07 99700 188300 288000 5.11
2007-08 92500 169500 262000 -9.03
2008-09 79500 182800 262300 0.11

Source: Economic and Marketing Intelligence Unit, Coffee Board,
Bangalore 2009

Table 3: India's Coffee Production Performance at the Global Level

(in' 000 bags of 60 kilo each)

Year Production India's Percentage of
 World India @ share increase /Decrease
 percentage for India's share of
 production

1991-92 101552 3000 2.95 --
1992-93 88913 2823 3.18 5.9
1993-94 90366 5333 3.91 25.15
1994-95 95154 3002 3.15 -15.03
1995-96 85250 3717 4.36 23.82
1996-97 101865 3417 3.35 -8.07
1997-98 95872 3805 3.97 11.35
1998-99 106163 4417 4.16 19.08
1999-00 115117 4867 4.23 10.19
2000-01 116619 5020 4.30 3.14
2001-02 108451 5010 4.62 -0.20
2002-03 123723 4588 3.71 -8.42
2003-04 103912 4508 4.34 -1.74
2004-05 115558 4592 3.97 1.86
2005-06 110131 4396 3.99 -4.27
2006-07 127653 5079 3.98 15.54
2007-08 117882 4148 3.52 -18.33
2008-09 127005 4610 3.63 11.14

Source: CIO and Coffee Board @ Board's Estimates, Bangalore 2009

Table 4: Estimated Domestic Consumption (in million tones)

Calendar Year Quantity (in MT)

1990 50000
1991 50000
1992 50000
1993 50000
1994 55000
1995 60000
1996 64000
1997 68000
1998 70000
1999 75000
2000 80200
2001 85000 *
2002 90000 *
2003 94400 *

Source: Economic and marketing Intelligence Unit, Coffee Board,
Bangalore 2009.

* provisional estimates

Table: 5 Exports of Coffee

Year Quantity Value (US Value (Rs.
 (in tones) $ million) in crore)

1990-91 100110 108.22 278.89
1991-92 111452 69.21 349.01
1992-93 113602 101.27 381.31
1993-94 136492 164.61 585.06
1994-95 137604 342.76 1096.52
1995-96 170990 456.03 1527.16
1996-97 181224 451.52 1466.33
1997-98 179054 477.04 1707.59
1998-99 211731 417.70 1751.59
1999-00 244941 371.62 1901.21
2000-01 246908 242.87 1374.25
2001-02 213586 216.23 1050.36
2002-03 207333 233.89 1051.45
2003-04 232684 262.03 1158.45
2004-05 211765 294.63 1224.67
2005-06 201555 353.00 1810.38
2006-07 249029 455.18 2007.90
2007-08 218996 502.84 2046.29
2008-09 196530 504.64 2235.35

Year Realished unit Percentage
 value unit/Realized of increase
 value (in Rs.) or decrease
 (for total)

1990-91 27858 --
1991-92 31314 25.14
1992-93 33565 9.25
1993-94 42864 53.43
1994-95 79686 87.42
1995-96 89312 39.27
1996-97 80912 -3.98
1997-98 95367 16.45
1998-99 82727 2.58
1999-00 77619 8.88
2000-01 55658 -27.72
2001-02 49177 -23.57
2002-03 50713 0.10
2003-04 49786 10.18
2004-05 57831 5.72
2005-06 49786 23.33
2006-07 80629 32.94
2007-08 965569 1.91
2008-09 113740 9.24

Source: Economic and Marketing Intelligence Unit, Coffee Board,
Bangalore -2009

Table 6: India's Share of Coffee Exports at Global level
(in 000 bags of 60 kilo each)

Year Export India's share Percent of increase /
 Word India @ (in percentage) Decrease for India's
 share of production

1991-92 79625 2024 2.54 --
1992-93 76780 1817 2.37 10.23
1993-94 73911 2907 3.93 59.99
1994-95 65718 2070 3.15 28.76
1995-96 74014 3572 4.83 72.56
1996-97 81745 2476 3.03 -30.68
1997-98 77806 3685 4.74 40.83
1998-99 82554 3442 4.17 -659
1999-00 92282 4214 4.57 22.43
2000-01 89248 4229 4.74 0.36
2001-02 90564 3730 4.12 -11.79
2002-03 90007 3567 3.96 -4.37
2003-04 87527 3826 4.37 7.26
2004-05 89546 2790 3.12 27.08
2005-06 88222 3581 4.06 28.35
2006-07 97620 3065 3.14 -14.41
2007-08 NA NA NA --
2008-09 NA NA NA --

Source: CIO and Coffee Board @ Board's Estimates, Bangalore 2009
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Author:Namasivayam, N.; Karuppuchamy, M.; Kanaga Anbuselvam, S.P.
Publication:Political Economy Journal of India
Geographic Code:9INDI
Date:Jul 1, 2011
Words:2978
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