Coffee Semi-annual

An Expert's View about Food , Beverages and Tobacco in India

Posted on: 27 Nov 2011

India’s 2010/11 coffee exports are estimated at a record 5.5 million 60 kg bags as strong international prices led to increased demand for Indian coffee. The 2011/12 crop is expected to reach a record 5.2 million 60 kg bags as good weather and higher prices encouraged farmers to improve their crop husbandry practices. 2011/12 exports are forecast at 4.2 million bags.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 11/1/2011 GAIN Report Number: IN1202 India Coffee Semi-annual 2011 Approved By: David Williams Prepared By: D. Williams Report Highlights: India?s 2010/11 coffee exports are estimated at a record 5.5 million 60 kg bags as strong international prices led to increased demand for Indian coffee. The 2011/12 crop is expected to reach a record 5.2 million 60 kg bags as good weather and higher prices encouraged farmers to improve their crop husbandry practices. 2011/12 exports are forecast at 4.2 million bags. Commodities: Coffee, Green Author Defined: 2010/11 Exports Soar Initial export data from the Indian Coffee Board suggest that India?s 2010/11 (October/September) coffee exports reached a record 5.5 million 60 kg bags. The Coffee Board is generally considered the most reliable and timely source for export data because exporters are required to register and report their activities with the Board. High international prices resulted in strong demand for Indian beans and soluble coffee exports. Export figures include re-exports of soluble coffee made from imported beans under duty-drawback programs. 2011/12 (October/September) exports are forecast lower, but are expected to exceed the previous forecast if international coffee prices are favorable during the marketing year. In addition, the rupee has weakened by nearly 10 percent against the dollar over the past month and could support larger exports if the exchange rate holds for a significant period of time. 2009/10 exports have been adjusted to reflect final Coffee Board data. Record 2011/12 Production Expected India?s 2011 crop has benefited from well-distributed rains during much of the growing season in addition to pre-season rains that helped establish early growth and support soil moisture levels. In the main producing state of Karnataka, good weather and high prices encouraged producers to improve their plant husbandry practices. Weather conditions in the states of Kerala and Tamil Nadu were similarly favorable and Tamil Nadu benefited from an ?up? year in the alternate bearing pattern cycle. Reports of disease or infestation by the white stem borer are minimal, but the extent of any damage will become clearer as harvest progresses. 2011 production is now expected to reach a record 5.2 million 60 kg bags, up 400,000 bags from the previous USDA forecast. For 2009/10 and 2010/11, production has been adjusted to reflect the latest estimates from the Coffee Board. Consumption Lower There is considerable debate about the level of coffee consumption in India. Coffee Board estimates suggest that coffee consumption is growing steadily and is currently around 1.7 million 60 kg bags. However, industry sources suggest that consumption is likely lower and estimates are clouded by the widespread use of chicory (as much as 400,000 bags) in the production of domestic coffee. While the popularity of coffee appears to be on the rise in India, home consumption, the main driver of demand, continues to be relatively limited outside of southern India where coffee has traditionally been more widely consumed. Coffee shops and cafes are spreading rapidly across India, but industry sources suggest that a few thousand coffee shops do not consume enough coffee to drive significant increases in consumption. Over the longer term, cafes will likely play a significant role in changing consumption patterns and consumer attitudes towards coffee, but the immediate effect on consumption is thought to be limited. Until stronger domestic demand develops, India?s coffee industry continues to be focused on exports and the preliminary data indicate that 2009/10 and 2010/11 were banner years for exporters, which suggests that the availability of coffee for domestic consumption was quite limited. In addition, higher coffee prices likely encouraged consumers to substitute away from coffee. Consumption levels have been reduced significantly in response to larger exports and higher prices. In addition, FAS Mumbai believes that coffee consumption levels reflected in USDA Washington estimates in recent years were likely overstated, which led to a significant reduction in stock level estimates. While there are no reliable data on coffee stock levels, the volume of exports during 2010/2011 suggests that stocks were likely higher than previously estimated. Table 1: Commodity, Coffee, Green, PSD C 2009/2010 2010/2011 2011/2012 o ffee, Green Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: Oct India 2009 2010 2011 USDA New USDA New USDA New O fficial Post Official Post Official Post Area Planted 395 400 0 400 0 400 (1000 HA) Area Harvested 350 355 0 355 0 355 (1000 HA) Bearing Trees 557 564 0 565 0 566 (MILLION TREES) Non-Bearing Trees 70 64 0 64 0 65 (MILLION TREES) Total Tree Population 627 628 0 629 0 631 (MILLION TREES) Beginning Stocks 250 250 140 597 40 91 (1000 60 KG BAGS) Arabica Production 1,600 1,577 1,500 1,569 1,475 1,650 (1000 60 KG BAGS) Robusta Production 3,250 3,250 3,600 3,465 3,325 3,550 (1000 60 KG BAGS) Other Production 0 0 0 0 0 0 (1000 60 KG BAGS) Total Production 4,850 4,827 5,100 5,034 4,800 5,200 (1000 60 KG BAGS) Bean Imports 725 725 550 750 500 600 (1000 60 KG BAGS) Roast & Ground Imports 0 0 0 0 0 0 (1000 60 KG BAGS) Soluble Imports 0 4 0 5 0 5 (1000 60 KG BAGS) Total Imports 725 729 550 755 500 605 (1000 60 KG BAGS) Total Supply 5,825 5,806 5,790 6,386 5,340 5,896 (1000 60 KG BAGS) Bean Exports 2,760 3,010 2,775 4,000 2,500 2,900 (1000 60 KG BAGS) Rst-Grnd Exp. 0 5 0 5 0 5 (1000 60 KG BAGS) Soluble Exports 1,350 1,214 1,325 1,450 1,250 1,300 (1000 60 KG BAGS) Total Exports 4,110 4,229 4,100 5,455 3,750 4,205 (1000 60 KG BAGS) Rst,Ground Dom. Consum 1,325 800 1,400 650 1,250 1,100 (1000 60 KG BAGS) Soluble Dom. Cons. 250 180 250 190 250 250 (1000 60 KG BAGS) Domestic Use 1,575 980 1,650 840 1,500 1,350 (1000 60 KG BAGS) Ending Stocks 140 597 40 91 90 341 (1000 60 KG BAGS) Total Distribution 5,825 5,806 5,790 6,386 5,340 5,896 (1000 60 KG BAGS) Exportable Production 3,275 3,847 3,450 4,194 3,300 3,850 (1000 60 KG BAGS) TS=TD 0 0 0
Posted: 27 November 2011

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