Rains brighten hopes of better coffee crop

But Retail Coffee Prices Unlikely To Soften On The Back Of A Possible Rise In Production

 KARNATAKA'S coffee plantations — arguably the coffee heartland accounting for 70% of the India's sectoral output — is optimistic of a good crop during 2009-10 with the key growing regions witnessing a bout of timely rains. Karnataka's production is expected to perk up country's coffee production to roughly 3 lakh tonnes (50-kg bag) compared to 2.8 lakh tonnes in crop year 2008-09.
    This comes at a time when coffee output in major markets like Brazil is expected to see a fall, while the global estimates suggest an almost stagnant crop.
    In 2008-09, country's coffee production slipped to 2.8 lakh tonnes on the back of a pronounced dry spell. The domestic output is heavily skewed towards Robusta — used for blending by global buyers — accounting for nearly 65% of the overall production. India exports nearly 2.3 lakh tonnes of the coffee produced. Growers who spoke to ET confirmed that all the three key coffee growing districts in Karnataka — Chikmagalur, Hassan and Kodagu —have been receiving showers. "The pre-blossom showers came in at the right time and were followed by adequate back-up showers. These rains were one of the best that we have seen perhaps during the last five years," said Ajoy Thipaiah, president of the Karnataka Planters Association (KPA). While Mr Thipaiah refused to comment on the 2009-10 output, the sectoral expectation is of production going up to 2.9 lakh tonnes to 3 lakh tonnes.
    "We have been receiving good rains. All major centres, be it Hanbal or Mudigere, have reported showers. Timely rains are welcome notably after what happened last year," added one grower in Hanbal. The possibility of a higher output in India comes at a time when key coffee growing nations like Brazil are expected to see a significant fall in production. Brazil is expected to produce between 36.9 million and 38.8 million bags (60-kg) indicating a year-onyear fall of over four million bags.
    The London-based International Coffee Organisation (ICO) has estimated that global coffee consumption would be placed around 129.6 million bags (60-kg) in 2009 against 128 million bags in 2008 (it needs to be mentioned here that while the Coffee Board measures output in tonnes, ICO reports production and consumption data on million bag notation).
    Although a higher Indian crop should lead to better realisation for Indian exporters, the trade remains cautious. "Timely pre-blossom showers is welcome news but Indian coffee has been a witness to changing weather patterns. Besides the output we are also concerned about the global economic recession with the instant coffee markets in Russia and Ukraine showing marked slowdown," said an exporter.
    But despite the possibility of higher output, retail coffee prices in India are not expected to see a softening in 2009-2010. "Arabica output in the country is down which has put pressure on availability of beans. We don't see retail coffee (ground) prices moving southwards on the back of a possible rise in output this year," said a ground coffee producer.
BREWING TIME
The pre-blossom showers come in at the right time, boosting morale of coffee growers
Karnataka's production is expected to perk up country's coffee production to roughly 3 lakh tonnes (50-kg bag)
Brazil, a major coffee producing nation, is expected to see a significant fall in production
Brazil's, loss may improve India's export prospect inglobal market in the time of recession