The Hindu Business Line : Coffee Board seeks sops to develop domestic market

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Bangalore Feb. 16 Aspiring to boost domestic coffee consumption by 50 per cent by the end of the 11th Plan, the Coffee Board has sought several incentives and concessions from the Union Government in the forthcoming budget for developing the local market.

The board aims to increase domestic consumption to around 1.2 lakh tonnes by the end of 11th Plan in 2012, up from the current level of 80,000 tonnes. At the same time, the Board is trying to increase the output of the commodity to 3.2 lakh tonnes from the current production levels of 2.75 lakh tonnes.

"We have placed our proposals before the Centre for creating an enabling environment, giving various incentives for promoting this type of intervention directed toward market development," said the Coffee Board Chairman, Mr G.V. Krishna Rau, on Friday. The proposals also included the issue of concessions needed in the domestic sector, Mr Rau said.

Domestic coffee consumption has grown annually by 5-6 per cent in the past few years to around 80,000 tonnes at present. Rising disposable incomes generated by the rapidly growing new economy are seen driving consumption in the country.

Despite rising domestic consumption, the coffee industry is still dependent on exports as 70 per cent of the production is exported. The country accounts for four per cent of the world coffee production, ranking seventh globally.

Replanting of coffee is likely to be taken up in about 40,000 hectares during the 11th Plan, whereas another 40,000 ha would be covered in the 12th Plan, he said. SBI Caps is expected to submit its financial presentation on the replanting scenario soon, he added.