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India has immense role to drive world coffee consumption, says

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Press Trust of India Bengaluru

Asia will drive world coffee consumption and India can play an immense role in this growth, the International Coffee Organisation said on Thursday.

Executive Director of ICO, Jose Dauster Sette said per capita consumption of coffee in India is 100 gms per person per year, while in Brazil which has invested in its internal market, each person consumes six kilos annually.

"That's 60 times what India consumes. So, there is lot of space to grow consumption here in India," Sette told PTI here.

Growth in consumption has to be led by the private sector, he said, noting that India has important coffee chains like Cafe Coffee Day.

 

"But there is also role for generic promotion...that's something that the (Indian) government can think about; that worked quite well in Brazil in the past," Sette said.

Earlier speaking at curtain-raiser press conference to announce the fifth edition of the World Coffee Conference (WCC) to be held here from September 7 next year, he spoke about how Asia is important for the global coffee industry.

Although Coffee has been produced in the region for many centuries, in the past three decades the Asian share of the world coffee production has doubled, growing from 16 per cent to 32 per cent, according to him.

This is mostly as a result of emergence of Vietnam as a leading coffee producer, but also due to increases in other countries, including India, he said.

"Even more importantly, Asia represents the future of world coffee consumption. While global coffee consumption is growing at just over two per cent, demand in South and East Asia is growing at over five per cent," he noted.

The prospects are particularly promising in India and China, with their large populations and traditional tea-drinking cultures that are increasingly attracted by coffee, Sette said.

India, a founding member of ICO, is the world's seventh largest coffee producer and grows both of the commercially important varieties of coffee - Arabica and Robusta.

The country is a fast-growing consuming market.

Meanwhile, Sette said global coffee prices have experienced a continued downward trend since 2016, dropping 30 per cent below the average of the last ten years.

Coffee growers all over the world are struggling to cover their operating expenses, while input, compliance and transaction costs continue to rise.

Consequently, farm incomes have declined and livelihoods of many coffee-producing households, the majority of which were led by small holders in low and middle-income countries are increasingly at risk, he said.

The slump in coffee prices has severe economic and social consequences for producing countries, Sette pointed out.

The main cause of the fall in prices is excess production, he said, adding, one of the most important ways in which to offset this surplus is by increasing consumption.

Asia in general and India in particular are key markets for world coffee consumption, he said.

Sette expects recovery in global coffee prices within two years.

"In the past, these cycles (slump in prices) have lasted may be about five years; we are three years into the slump, and I hope that in one or two years we can see a recovery. We have already seen a stabilisation -- the prices have stopped falling -- but they are still at very low levels," he added.

Stating that WCC is the most important event on the ICO's calendar and held at intervals of five years, he noted it's being hosted for the first time in Asia (at Bengaluru) next year.

ICO brings together 78 exporting and importing countries representing 98 per cent of world coffee production and 83 per cent of world consumption through international cooperation, it was noted.

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First Published: Oct 17 2019 | 6:10 PM IST

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