India. Coffee Semi-annual. Nov 2014 Jan. 12, 2015
India’s 2014/15 coffee crop (Oct/Sep) is forecast at 5.1 million 60 kg bags, marginally higher than the revised MY 2013/14 estimate. The forecast Robusta crop increase should offset the decline in Arabica yields caused by pest pressure and the smaller ‘off’ year crop. Lower export estimates coupled with rising imports have raised stock levels in MY 2013/14 and 2014/15.
Marketing year 2014/15 coffee production is estimated at 5.1 million 60 kg bags; a slight reduction from the USDA forecast. While the planted area remains split evenly between Arabica and Robusta, growers in Karnataka, the largest area, are anticipating Robusta yields will be higher than last year due to improved agronomic practices. Arabica yields are expected to be lower since this will be an ‘off’ year in its biennial cycle. Arabica crop harvesting begins in November or early December and the Robusta crop harvest begins in January. Production typically arrives in the market place by the end of the month it is harvested. Industry sources indicate that average farm gate prices are almost 35 percent higher than last year. As such, growers and large exporters are holding stocks in anticipation of even higher prices. The Coffee Board of India final estimate (May/June) estimated marketing year 2013/14 production at 5.07 million 60 kg bags. Government of India rainfall data indicates that rainfall amounts in the southern interior portions of Karnataka, which accounts for 70 percent of total production, were 20 percent higher than normal during the monsoon season.
More than 90 percent of India’s coffee production is exported and the domestic industry focuses much of its marketing effort on export promotion. Domestic consumption for coffee has remained relatively flat despite a large number of international coffee chains entering the Indian market. There are signs that the popularity of coffee is increasing with the spread of both foreign and home-grown coffee shops. However, exports continue to siphon large amounts of coffee away from the domestic market and consumption estimates are largely unchanged.
Indian coffee remains high-priced in the global markets. Demand remains sluggish as buyers are withholding major purchases in anticipation of newer crop arrivals. Cheaper imports of soluble coffee increased as companies changed their blends to contain the rising costs. Post based the MY 2013/14 export estimate on Coffee Board export permits and running export volumes. As such, exports have been lowered by 200,000 60 kg bags. Export destinations remain in Europe with Italy and Germany the top markets along with Russia. Exporters indicate that with farm gate prices at current level, export channels will be the most likely destination for Indian coffee beans.
MY 2014/15 imports are expected remain around 1 million 60 kg bags. MY 2013/14 imports have been revised higher as cheaper green bean imports from Vietnam and Indonesia were processed and re-exported as soluble coffee with Russia and Turkey being the top export destinations.
Policy - Export e-permit system re-launched
On October, 20, 2014, the Minister of State for Commerce and Industry, Government of India launched an e-governance initiative of a revised ‘e-permit portal’ whereby exporters can file their applications online and Coffee Board can process and issue export permits and ICO certificates of origin. The exporters through the portal can seek extension for validity of export permits, and apply for amendments if required