Robusta yield. Higher Robusta yield to boost India’s coffee output to 3.31 lakh tonnes: report

The United States Department of Agriculture (USDA) sees India’s coffee production and the consumption increasing for the crop year 2021-22 (October 2021-September 2022).

In its latest report, the USDA India Post has pegged the coffee output for 2021-22 at 5.53 million bags of 60 kg each or 3.31 lakh tonnes over last year’s 5.23 million bags. Production for 2021-22 comprises 76,800 tonnes of Arabica and 2,25,000 tonnes of Robusta, it said.

"Unseasonal rains in November are expected to negatively impact Arabica crop yields and delay the harvest by at least two weeks, which will be offset by higher yields of Robusta leading to a six percent increase in overall coffee yields," the USDA India Post said.

Output estimates

USDA sees a two per cent decline in Arabica yields, while it expects Robusta yields to rise by nine per cent. Overall yields are expected to improve by six per cent to 789 kg per hectare over last year, it said.

Coffee growers and the trade also expect a lower arabica crop due to the impact of the recent rains. The Karnataka Planters Association, the apex growers body, recently said it expects a 30 per cent decline in Arabica output for 2021-22.

The USDA’s estimates are significantly lower than the Coffee Board’s initial or post blossom estimates of Arabica at 108,300 tonnes and robusta at 260,700 tonnes. The Board is yet to announce the Post-Monsoon estimate, which reflects the ground realities considering the impact of rain and monsoon.

Domestic consumption

Also, the report estimates domestic coffee consumption to be one per cent higher at 1.21 million 60 kg bags for 2021-22. Sales of soluble coffee primarily drive demand for at-home consumption through e-commerce and retail channels. The rise in at-home consumption will be supported by the gradual reopening of the hospitality (hotels, restaurants, catering events) and institutional (corporate offices, airports) sectors.

“Robust sales during the pandemic last year led a number of regional coffee processors/retailers to pursue and expand their footprint in new cities and explore new retail channels (other than traditional retail stores) with wider product offerings,” it said. The household consumption of soluble coffee will likely constitute a much larger share (65 per cent) of domestic consumption during the next year. However, rising energy costs, which impacts raw material processing costs and other expenses such as packaging, freight, and logistics, pose a major challenge to suppliers in the short term.

Exports

The USDA Post estimates India’s coffee exports for the 2021-22 marketing year at 5.69 million 60-kilogram bags or 3.41 lakh tonnes due to increased demand from major markets. Citing trade sources, the Post said current prices are limiting international buyers from placing larger orders. New crop arrivals from December onwards should help keep the prices in check, and orders should increase. However there may be a slight reduction (3-4 per cent) in the export of green beans as higher freight costs push buyers to consider sourcing coffee from other origins, such as Uganda, it said.

Trade sources indicate that both domestic and international coffee prices will remain high as rising freight costs (due to shipping delays) will stay for additional 6-12 months, it said. Trade sources indicate that the cost of shipping a container to European destinations has gone up sevenfold compared to last year. There is also a higher frequency of cancellations by carriers when booking space on vessels, and there are substantial delays in transit times.

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