Hit by poor rains and hot temperatures on its crucial flowering stage, experts expect India’s coffee crop output to drop to around a quarter in nearly two decades.
Even so, the diminishing production from the world’s sixth-biggest coffee producer behind Brazil and Vietnam could provide support to the already declining global prices caused by a drop in output from its counterpart Brazil.
India whose history of coffee cultivation dates back to 1670 with the use of seven smuggled beans to mainly produce robusta for instant coffee has experienced back to back droughts causing ground water to be depleted.
According to India’s Meteoroligal Department, coffee growing regions in the southern parts of India received a 70% lower rainfall than normal between the month of March and Mid –May 2016.
Consequently, India’s southern state of Karnataka which contributes 70% of its total output is expected to produce 230,000 tonnes registering a 25% reduction in its coffee production. This is the state’s lowest production of coffee since the 1998/99 production season that left experts predicting that India is likely to produce 350,000 coffee tones in the current season ending on the 30th of September.
An Indian Exporter claims that the current production problem will dent shipments in the year 2016/17 with few carrying forward stocks. This situation and the recovery of global prices has exerted pressure to exporters to aggressively sell their coffee. Paying a premium over global prices and piling the pressure are India’s main coffee importers Italy, Germany and Belguim who import large parts of India’s three-quarter exports. The three countries are paying a premium over global prices.
India’s exports have been seen to have risen from 19.4% to 213,187 tonnes during the starting marketing year of October 1st.
Source: MITC, 18th May, 2016