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Coffee growers report lower than expected harvest

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NOT MUCH: A farmer harvesting coffee beans at a plantation in Kothagiri near Udhagamandalam, Tamil Nadu. Coffee harvest is in full swing but the growers are reporting less than anticipated production. K.K. Mustafah
NOT MUCH: A farmer harvesting coffee beans at a plantation in Kothagiri near Udhagamandalam, Tamil Nadu. Coffee harvest is in full swing but the growers are reporting less than anticipated production. K.K. Mustafah

M.R. Subramani

Chennai, Jan. 20

FEARS of coffee growers that the current season crop could be lower than revised estimates have begun to turn true. Most of them are now reporting lower than anticipated harvest, especially in arabica.

According to Mr Anil Kumar Bhandari, former president of the United Planters' Association of Southern India (Upasi), some of the growers are reporting about 20 per cent loss in the estimates made for arabica crop.

"Whatever has been projected for the robusta crop could turn out to be right but arabica is likely to be short," he said.

When contacted, Mr Bose Mandanna, former vice-president of Coffee Board, said growers were reporting loss in arabica crop from almost all estates. "The arabica crop has proved to be thin and people seem to have been misled by the dense growth after the rains," he said.

"The loss is after the discount that had been made for the damage caused by the white stem borer," he said.

The Coffee Board had initially estimated the crop, after blossom, at 2.94 lakh tonnes (lt) for the current November 2005-October 2006 season but after the monsoon pruned it to 2.82 lt. Of this, arabica has been projected to be 98,500 tonnes and robusta 1.83 lt. From the initial estimates, output estimates for arabica was cut 7,000 tonnes and that of robusta by 5,000 tonnes. This is against last season's 2.75 lt.

"We fear that the total crop could now be in the region of 2.7 lt only," Mr Bhandari said.

"We suspect that heavy rains could have affected arabica crop also as in the case of robustas," Mr Mandanna said. The robustas were affected by "wet feet" that resulted in the crop going into a coma.

The lower crop could impact exports, as the availability would be lower.

"Exports are recovering but we are not sure how much it would go up in volume terms. Certainly, the unit realisation will be up," Mr Bhandari said. Last year, exports are projected to have declined below two lt.

According to Mr Mandanna, tight supply in the global market will help Indian exports. "Though Brazil is expecting a crop of 40-42 million bags (60 kg), it will just about meet their commitments. Vietnam is reporting a crop that is 30 per cent less than last year. All these should help our growers," he said.

According to Coffee Board statistics, permits have so far been issued to export 7,427 tonnes this year against 5,759 tonnes last year with shipments to the tune of 547 tonnes being confirmed.

The tight supply has led to global prices touching the season high of 128.50 cents a pound in New York for arabica on Tuesday. On Thursday, it closed lower at 119.40 cents.

In London, robusta for March delivery touched a 6-1/2-month high of $1,279 on Wednesday and it ruled lower at $1,259 on Friday.

Indian offers for robusta cherry has increased $40 a tonne this week to $1,440 a tonne f.o.b, while arabica parchment has gone up $60 to $2,615.

Reports of lower harvest, coupled with tight supply in the global market have led to improvement in farmgate prices.

Currently, arabica parchment is quoted Rs 4,500-4,560 against Rs Rs 4,050-4,200 a bag (50 kg) on January 6. Similarly, robusta cherry is up at Rs 2,425-2,485 from Rs 2,025-2,200.

"The prices are good for the growers. This could lead to growers being rid of loans and becoming largely debt-free next year," Mr Bhandari said.

Industry sources said they had expected prices to touch Rs 4,500 a bag for arabica parchment but it had topped the rate much before they had expected.

(This article was published in the Business Line print edition dated January 21, 2006)
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