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COFFEE IN INDIAN
EXPORTS AND
EARNING FOREIGN
EXCHANGE
RITEN SAKHIYA 85
JAIVEER DUGGAL 21
POOJA PATIL 76
JASBIR MAAN 50
SNEHAL RAMTEKKAR 82
INTRODUCTION
Indian Economy grew by 5.4 per cent in 2001-02, which is
considered to be one of the highest growth rates in the world for
the year. This growth is supported by a growth rate of 5.7 per
cent in agriculture and allied sectors, 3.3 percent in industry and
6.5 per cent in services.
The following pie chart shows the share of leading tea exporters
in the world. Sri Lanka (18.51%), China (17.68%), Kenya (17.61%)
and India (10.82%) were the leading exporters with approximately
two-thirds of the global market share in 2004. The other countries
contributed 12.84 per cent of the world tea export. The following
pie diagram shows the market share of major tea exporting
countries during 2004.
India’s Export
India exported 1.58 lakh tonnes of tea valued at Rs.1632.09
crores in 2005-06. There has been a decline in India's tea exports
in 2005-06. The annual export from India was hovering around
1.80 lakh tonnes between 2001-02 and 2004-05. But 2005-06
witnessed 13.66% reduction in volume of export and 11.30%
reduction in export earnings.
Export of Tea from India during 2001-02 to 2005-06
Quantity
Value (Rs.
Year (lakh
Crores)
tonnes)
Pakistan
3%
U.K
16%
Germany
4%
Iran U.A.E.
U.S.A 15%
5% 7%
Kazakhstan
6%
Organic Tea
Total world production of organic tea is estimated at around 9000
tonnes in 2001 which represents less than 1% share of global tea
production. India produced around 3150 tonnes of organic tea in
2001 which accounts for one-third of the world production. India is
not only the pioneer but also one of the leading producers of
organic tea in the world.
Darjeeling has the largest number of estates under organic
cultivation followed by Assam/ Dooars and South India. However,
Oothu tea estate of Bombay Burmah Trading Corporation (BBTC)
in South India is the single largest organic tea producer in the
country and also one of the largest organic gardens in the world,
producing around 1000 tonnes of organic tea annually.
To support and strengthen the globally recognized organic
movement, the producers of organic tea in India formed the
Indian Bio Organic Tea Association (IBOTA) in 1996. FAO funded
model organic farms have also been planned to establish Assam
and Darjeeling in North-East and Valparai in South India.
TEA BOARD OF INDIA
Tea is one of the industries, which by an Act of Parliament comes
under the control of the Union Govt. The genesis of the Tea Board
India dates back to 1903 when the Indian Tea Cess Bill was
passed. The Bill provided for levying a cess on tea exports - the
proceeds of which were to be used for the promotion of Indian tea
both within and outside India. The present Tea Board set up under
section 4 of the Tea Act 1953 was constituted on 1st April 1954. It
has succeeded the Central Tea Board and the Indian Tea
Licencing Committee which functioned respectively under the
Central Tea Board Act, 1949 and the Indian Tea Control Act, 1938
which were repealed. The activities of the two previous bodies
had been confined largely to regulation of tea cultivation and
export of tea as required by the International Tea Agreement then
in force, and promotion of tea Consumption.
Indian coffee has a unique historic flavour too! It all began with a
long, arduous journey around four hundred years ago... when the
legendary saint Bababudan brought seven magical beans from
distant Yemen and planted them in the Chandragiri hills of
Karnataka. The sensations of aroma, flavour, body and acidity
that you enjoy with each coffee experience is rooted in these
mystical beginnings.
It is often said, the Indian coffee grower pours his life into the
crop. Is it any wonder then that India has consistently produced
and exported a remarkable variety of high-quality coffees for over
one hundred and fifty years!
According to latest ICO monthly report, world consumption in
2006 is estimated at 117.93 mn bags compared with 116.06 mn
bags. While ICO member countries' domestic consumption in
2006 is estimated at little over 31 mn bags, the importing
countries consumption is estimated at 86.84 mn bags. European
Community's consumption is higher at 85.75mn bags compared
with 38.97mn bags in 2005. India accounts for about 4.5 percent
of world coffee production and the industry provides employment
to 6 lakh people. Among the coffee growing states, Karnataka
accounts for 70 percent of country's total coffee production
followed by Kerala (22 percent) and Tamil Nadu (7 percent).
Europe accounts for about 70 percent of India's total coffee
exports. Of this again, 70 percent is shipped via Suez Canal. Major
Indian coffee importing countries include Italy, Germany, Russian
federation, Spain, Belgium, Slovenia, US, Japan, Greece,
Netherlands and France.
COFFEE: AN SIGNIFICANT
EXPORT COMODITY
COFFEE BOARD OF INDIA
The Coffee Board of India is an autonomous body, functioning
under the Ministry of Commerce and Industry, Government of
India. The Board focuses on research, development, extension,
quality upgradation, market information, and the domestic and
external promotion of Indian coffee.
Research and Development
The Coffee Board conducts basic and applied research on coffee
and can boast of 75 glorious years in coffee research. The
Research Department publishes various journals and periodicals.
It also offers various services to growers and exporters.
The Board also encourages the consumption of coffee in India and
abroad. Towards this end, the Board participates in food and
Beverage exhibitions abroad. The Board also runs 14 India Coffee
Houses in the country. The India Coffee House brand of coffee
powder is well known in India for its quality and aroma.
The Board has for long years worked on the quality of Indian
coffee. The Board runs two quality control laboratories in
Bangalore and Hassan, which control and advise the industry on
quality issues. The labs are equipped with the best roasting and
brewing machines. The best cup- tasters and quality evaluators
keep a strict vigil on the pre and post harvest processes with a
view to ensure that the quality of Indian coffee is maintained.
Economic & Market Intelligence Unit
The Board has an Economic & Market Intelligence Unit functioning
from its head office at Bangalore. The unit undertakes various
activities related to market information & intelligence, market
research studies, crop forecasting and coffee economics aspects.
The unit also undertakes studies on research related to the coffee
trade including WTO issues. Notable publications include the daily
market intelligence report, a comprehensive database on coffee
(Bimonthly) and market intelligence report (Quarterly). The
periodical reports that are already completed included Coffee
Consumption in Urban India 2001 and Coffee Consumption in
India 2003. The unit is currently coordinates a study on logistics
and competitiveness of coffee producing countries (India, Vietnam
& Brazil) and a manual on coffee retailing.
EXPORT PATTERN
India is one of the leading exporters of coffee and its exporting
coffee to various parts of the world. India is earning considerable
amount of foreign exchange through export of coffee. The
statistics are as under:
Exports of Coffee from India by Countries FY
2007/2008 *(Quantity, Percentage and Unit Value)
Quantity % to Unit Value
No Destination
(In MT) Total Rs/Tonne
1 ITALY 53804 24.57 88567
2 RUSSIAN FEDERATION 25183 11.50 100657
3 GERMANY 14236 6.50 101695
4 BELGIUM 10615 4.85 94201
5 SPAIN 8802 4.02 81100
6 FINLAND 7914 3.61 92434
7 GREECE 5470 2.50 80084
8 SLOVENIA 5400 2.47 77728
9 CROATIA 5011 2.29 83261
10 UKRAINE 4943 2.26 106486
11 JORDAN 4813 2.20 110456
12 SWITZERLAND 4797 2.19 105858
13 U.S.A. 4304 1.97 94086
14 SINGAPORE 4207 1.92 83073
15 KUWAIT 3906 1.78 15049
16 FRANCE 3875 1.77 92893
17 HUNGARY 3572 1.63 86853
18 PORTUGAL 3387 1.55 81446
19 AUSTRALIA 3195 1.46 94776
20 NETHERLANDS 2858 1.30 91867
21 ISRAEL 2734 1.25 87345
22 LIBYA 2416 1.10 80343
23 MALAYSIA 2386 1.09 82735
24 JAPAN 2158 0.99 96297
25 LATVIA 2055 0.94 107371
UNITED ARAB
26 1539 0.70 121617
EMIRATES
27 POLAND 1518 0.69 91208
28 SAUDI ARABIA 1398 0.64 116296
29 EGYPT 1373 0.63 86845
30 TAIWAN 1306 0.60 83415
31 CANADA 1289 0.59 87299
32 CHINA, PEOPLES R/O 1173 0.54 78812
33 ROMANIA 1100 0.50 79440
34 TURKEY 1080 0.49 121071
35 UNITED KINGDOM 1047 0.48 105321
36 ESTONIA 929 0.42 103950
37 NORWAY 873 0.40 91627
38 SOUTH AFRICA 846 0.39 135618
39 AUSTRIA 799 0.36 74991
40 VIETNAM 791 0.36 83685
41 ALGERIA 727 0.33 74945
42 MYANMAR 639 0.29 76844
43 KENYA 576 0.26 92198
44 KOREA, PEOPLES R/O 543 0.25 82658
45 OTHERS 7414 3.39 106102
TOTAL 218996 100.00 93569
*provisional (includes re-exports)
FOREIGN EXCHANGE EARNED
THROUGH COFFEE
Foreign exchange earned through exports of coffee from India
failed to touch Rs 2,000 crore mark in the coffee year ended
September 2009 despite higher price realisation for the
commodity at the global level. Exports stood at 1.81 lakh tonne,
fetching foreign exchanges of around Rs 1,970 crore, according to
provisional figures released by the Coffee Board.
Consumption of coffee across the world increased in the past two
years despite the economic slowdown, pushing prices at an
alarming rate last year. But India failed to cash in on owing to
lower production, said an official of the Coffee Board. The unit
value of Indian coffee at international market increased to Rs 1.09
lakh per tonne in 2008-09 from Rs 1.05 lakh in the previous year.
According to state-owned Coffee Board, India earned foreign
exchange of Rs 2,328 crore in the coffee year ended September
2008, up by 23% from Rs 1,892 crore in the previous year.
Although, exports in the 2007-08 crop year was almost flat at
2,20,030 tonne compared to previous year's 2,19,796 tonne,
higher price in the global markets helped realisation in the 2007-
08 crop year to cross Rs 2,000 crore mark for the first time.
As coffee prices continued to soar, the government anticipated
that foreign exchange through coffee exports would surpass Rs
2,500 crore in 2008-09 crop years. However, the target was not
achieved, as erratic rains dragged down production. Coffee
Board's post-blossom estimate for 2008-09 had stood at a
whopping 2.93 lakh tonne, but it fell to 2.62 lakh tonne during the
post-monsoon estimation. In fact the area covered under coffee
plantation increased to 3, 94,352 hectares in 2008-09, up from
3,88,195 hectares in the previous year, but production was
almost flat at 2.62 lakh tonne.
The dip in exports in 2008-09 was mainly due to decline in import
by Italy and Russia, the top two coffee importers from India.
Exports to Italy declined to 35,104 tonne in 2008-09 from 53,539
tonne while exports to Russia tumbled to 13, 308 tonne from 23,
309 tonne. Exports to Germany, the third top coffee customer of
India, also declined to 9,024 tonne from 15,503 tonne while
exports to Belgium declined to 7,073 tonne from 11,195 tonne.
However, growers and exporters feel that exports will revive in
the current crop year that starts on October 1, 2009, as the
production is likely to pick up. According to post-blossom
estimates of the Coffee Board, output in 2009-10 will be around
3,06,300 tonne, of which Arabica output will be at 101,525 tonne
and robusta at 2,04,775 tonne.
Tamil
12070.00 4,185 16,225 14,850 4,700 19,550
Nadu
Total
79,500 182,800 262,300 101,525 204,775 306,300
(India)