Global Economics

Bad Weather Takes Toll on India's Coffee Crop


Heavy monsoon rains in August and September could reduce the current coffee crop by 15%

India's coffee crop for the current coffee year (October-September) could see a potential 10-15% drop on the back of heavy rains in August and September this year, reports Arun Iyar In Bangalore.

The Coffee Board in its post-monsoon estimates had placed the output at 3.1 lakh tonnes. The rainfall, a repeat of what happened last year, hit the three key coffee growing districts of Karnataka—Kodagu, Chikmagalur and Hassan.

A 10-15% drop means the production would match the country's output in 2008-09 of about 2.7 lakh tonnes. A confirmation of the drop in output would be available only next month when coffee harvesting commences. Traders, however, estimate that the country's coffee production in 2009-2010 would be further down at about 90,000 tonnes to 100,000 tonnes of Arabicas with Robusta output at 110,000 tonnes to 120,000 tonnes.

Karnataka witnessed torrential rains from the last week of August till the end of September. While rains battered northern Karnataka massively, the Malnad region (which accounts for a sizeable production of coffee) was consistently experiencing heavy rainfall notably during the second week of September when this region received 110 mm of rains against a normal 29 mm.

"We had virtually monsoon-like rains which lead to excess moisture in the soil. The coffee plant is forced to either leaves with berry droppings. Indian coffee is increasing falling prey to global warming," said a leading coffee grower.

Even as there are worries about a drop in the output, exporters have already commenced forward-booking with producers being offered around Rs 5,500 to Rs 5,600 per 50-kg of raw coffee (berries). This price translates to a 10-12% year on year increase to what was offered last year. Deliveries for exports should start from December onwards.

However despite prospects of a lower crop, traders believe that it would not translate into a immediate rise in retail prices notably for the roast & ground coffee(R & G) coffee.

"The direction retail prices would take can be determined only after June-July next year when coffee exports are completed. As of date, while there are negligible stocks of Arabicas available in the domestic market, there is good amount of Robustas. It is believed that there are around 10,000 tonnes to 15,000 tonnes of Robusta which is available. Given the huge volume of Robustas being grown, many roasters have shifted to using Robusta in their R & G coffees," curing sources added.


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