The Hindu Business Line : Coffee output to be lower than board’s pruned estimate

Chennai, Dec. 5 Coffee production during the current year that began in November is likely to be lower than the Coffee Board’s revised estimate of 2.76 lakh tonnes (lt). The plantation industry, however, is uncertain about the extent to which the production could be lower with the crop being hit by rains in different phases since February.

“There are some growers who are saying that they are seeing the worst crop of their life. Some are reporting 20-30 per cent fall in their crop which means production could be lower than 2.5 lt,” said a grower from Kodagu.

A curer said he was witnessing at least 30 per cent lower arrival compared with last year. “Initially, we thought robusta will not be hit but we see that also down by 10 per cent,” the curer said.

Arabica lower

But Mr Ramesh Rajah, President of the Coffee Exporters Association, said arabica crop may be 10-15 per cent lower than the revised estimates of the Coffee Board. “We feel there will not be any big variation in the robusta crop projections made by the board. We are also not convinced about the extent of fall in robusta production as is being reported by some growers,” he said.

“The arabica crop was hit as pre-blossom showers came pretty early in February. The follow-up rain was also delayed. Robusta, on the other hand, has been affected by the rains in November at a time when they were ready for harvest,” said the curer.

“Yes, the unusual rain pattern has affected arabica. Exporters have carried out extensive survey and we think robusta will be around 1.86 lakh tonnes,” said Mr Rajah.

‘No big drop’

In its revised estimate, the Coffee Board has projected arabica production at 90,050 tonnes and robusta at 1.865 lt. Initially, it had estimated the crop to be 2.93 lt with arbica making up one lakh tonnes and robusta the rest.

“The robusta crop is good in Kerala and we are not seeing any big drop in the crop in robusta,” Mr Rajah said.

Revised projection

Mr A. K. Bhandari, a Coffee Board member, said growers were reporting lower production. “The Coffee Board has made a revised projection. Any further revision will be made only after the harvest gets over. Also, exports figure will be able to pinpoint the fall in production, if any. If there is 20-30 per cent fall in production, then it will show on exports, even if domestic consumption goes up,” he said.

Exports are on but Mr Rajah said despite the fall in the rupee against the dollar, they had slackened. “Input costs for producing coffee are high. International prices have declined and domestic prices are higher,” he said.

Mr Bhandari said the fall in the rupee would compensate to some extent any fall in realisation. “Last year, the rupee was near 40 to the dollar. Now, it is 50. It will help to make up to some extent,” he said.

Delayed arrivals

Arrivals of the new crop, on the other hand, are not good. “Rains in November have delayed the arrivals, though they began a month before the actual harvest time,” Mr Rajah said. “But we expect arrivals to pick up and be better around Christmas time,” he said.

According to the Coffee Board’s provisional estimates, 2.09 lt of coffee were exported till Thursday this year against 2.06 lt during the same period a year ago. However, re-exports were higher at 20,969 tonnes (15,216 tonnes).

Prices crash

Meanwhile, farm gate prices are currently ruling at Rs 4,900-5050 for a 50-kg bag of arabica parchment against a high of Rs 5,525 witnessed early in March. Arabica cherry prices are quoting at Rs 2,300-2,350 against Rs 2,525 seen in March.

In the global market, arabica prices have slid to $1.0615 a pound from a record 1.75 witnessed in March, while robusta have declined to $1,636 a tonne from $2,750. The fall in the rupee has to an extent arrested a steep fall in the domestic coffee prices.

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