Coffee output to be hit in 2016-17

Drought in major growing areas of Karnataka is the main reason

After five good years, coffee output might see a dip.

The current season, ending September,  saw high production at 350,000 tonnes. The next one is expected to be tougher for coffee output, with drought in major growing areas of Karnataka. The state normally produces 70 per cent of the all-India total.

The coffee year begins on October 1 and the 2014-15 output was 327,000 tonnes; this year ending September 30 will see 350,000 tonnes, says the United Planters' Association of Southern India. It had been 314,000 tonnes in 2011-12.

However, in the 2016-17 season, the estimate is for Robusta production to come down by 30 per cent and of Arabica by 10-15 per cent. In 2015-16, Robusta output is estimated at 242,000 tonnes (229,000 tonnes, a year before); Arabica's is estimated at 107,000 tonnes (earlier 98,000 tonnes).

Marvin Rodrigues, Managing Partner at James Rodrigues Group of Plantations and former Chairman of Karnataka Planters' Association agrees to this saying that a tough year is expected ahead. 

He attributed the drop mainly due to drought in the major districts of Karnataka, which has been the hub for coffee plantation. In 2015-16, estimated production in Karnataka is around 2,53,340 of the total estimated production of 3.50 lakh tonnes.

Of the 350,000 tonnes, the Karnataka estimate is 253,300 tonnes. Kerala's is 69,650 tonnes (earlier 67,700 tonnes) and Tamil Nadu's 18,125 tonnes (17,875 tonnes earlier). The United States' department of agriculture (USDA) also estimates a fall, has projected a drop in production, pointing to dry conditions during the flowering and fruit-set period. Other major growers like Brazil, Indonesia and Vietnam are also going to face this problem, said USDA, and so, a slip in world export. It forecast global consumption at a record 150.8 million bags (60 kg each), drawing ending inventories to a four-year low. The cost of production is also up in India, with a rise in labour cost. M Shaji Abraham, general manager at Bhavani Tea & Produce Co, a leading manufacturer of tea and coffee from Tamil Nadu, said daily wages were now Rs 380, from Rs 250 a year before; prices had dropped Rs 70 a kg.

For instance, a year before, Arabica per kilo was Rs 200-220; it dropped to around Rs 130 in 2015-16.

“It has clearly taken a hit on companies like us. To mitigate the loss, we have looked at more premium products for the niche category,” said Abraham. The company started the exercise a year before and has 30 per cent of its production earmarked for premium products. It will increase it this year to 50-60 per cent.