Coffee crop could rise 12%

Estimates for the coffee crop was revised to 290,000 tons of 4.8 million bags of 60 kilogram each for marketing year (MY) October-September 2004-05, 12 per cent higher than the revised MY 2003-04 estimate of 260,000 tons of 4.3 million bags).

Higher yields resulting from excellent pre-blossom showers and back up rains were likely to reverse the negative impact of last year's drought and poor management practices adopted by farmers in response to lower prices.

The 2004-05 crop would include 105,000 tons of Arabica and 185,000 tons of Robusta compared with 100,000 tons of Arabica and 160,000 tons of Robusta in 2003-04.

Although not supported by statistical data, a shift in area from coffee to other crops like vanilla, spices and oranges was reportedly taking place at coffee plantations.

Diversification had emerged as a risk management strategy for many coffee growers. Growing domestic and export demand was driving higher production of types suitable for instant coffee.

India's coffee area and production has registered growth in the past, with area rising from 220,000 hectares in the early 1990's to 320,000 hectares. The Robusta area grew faster than area under Arabica.

Arabica yield was stable. Robusta yield rose to 1100 kilograms per hectare in recent years, almost 30 per cent higher than the Arabica yield. Robusta production now accounted for more than 60 per cent of production.

Coffee Board had been advocating a shift from Robusta to Arabica. However, industry sources said such a shift was not feasible. Lower return led framers to neglect Arabica, which cost more to produce.

Coffee was grown in 17 states but was concentrated in Karnataka, Kerala, and Tamil Nadu. Approximately 5 million people depended on the industry, including nearly 550,000 plantation labourers.

Estimated labor requirement for a hectare of yielding plantation of Arabica and Robusta, respectively, were 495 man-days and 330 man-days per year. Both small holders and estates produce coffee, and the wide range of production intensities and yields reflected this.

Almost 98 per cent of the total 178,300 coffee holdings were less than 10 hectares, and accounted for 60 per cent of production. Large-holder estates of over 10 hectares accounted for about 30 per cent of the total coffee area and 40 per cent of production.

High 1997 and 1998 coffee prices, along with liberalisation of the coffee trade in the 1990's, encouraged Indian growers to plough back profits in upgrading plantations, raising production and processing capacity.

Before liberalisation, the scope for achieving significant quality price differentials for growers was lost under the pooling system, since different growers' coffees were clubbed together. After liberalisation, quality of some plantations improved significantly as differentials emerged.

India had entered the arena of "specialty coffees" recently with "estate branded" types offering unique cup characteristics. However, positive quality differentials were slower to emerge with small growers.