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ROLE OF TEA AND

COFFEE IN INDIAN
EXPORTS AND
EARNING FOREIGN
EXCHANGE

SUBJECT : EXPORT AND IMPORT


MANAGEMENT
SUBMITTED TO : PROF. DAVE
COLLEGE : BHAVAN’S COLLEGE
CLASS : S.Y. B.M.S. (B)
ACADEMIC YEAR : 2009-2010
(SEMESTER-IV)
SUBMITTED BY:
SWATI TIKKU 101

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.

India is also exporting various commodities to various countries.


Some of the tangible goods exported by India are agricultural
items such as wheat, rice, Maize, pulses and many other food
grains. India is one of the leading producer and exporter of jute.
Jute is largely produced on the Ganga-Brahmaputra delta in West
Bengal. Gems and Jewellery is another significant area of exports
for India.

Among its intangible exports ayurvedic medicines comprises a


major portion. Kerela is famous in this regard as it is attracting a
number of foreign tourists.India is earning considerable amount of
foreign exchange by its exports.

Tea and Coffee are significant items exported by India which is


fetching a big amount of foreign exchange. Here is a detail study
of role of tea and coffee in Indian exports, its export pattern and
the foreign exchange earned by India by it.
INDIAN TEA INDUSTRY
The tea industry in India is about 172 years old. It occupies an
important place and plays a very useful part in the national
economy. Robert Bruce in 1823 discovered tea plants growing
wild in upper Brahmaputra Valley. In 1838 the firs Indian tea from
Assam was sent to United Kingdom for public sale. Thereafter, it
was extended to other parts of the country between 50's and 60's
of the last century. However, owing to certain specific soil and
climatic requirements its cultivation was confined to only certain
parts of the country.

Tea plantations in India are mainly located in rural hills and


backward areas of North-eastern and Southern States. Major tea
growing areas of the country are concentrated in Assam, West
Bengal, Tamil Nadu and Kerala. The other areas where tea is
grown to a small extent are Karnataka, Tripura, Himachal
Pradesh, Uttaranchal, Arunachal Pradesh, Manipur, Sikkim,
Nagaland, Meghalaya, Mizoram, and Bihar.

Unlike most other tea producing and exporting countries, India


has dual manufacturing base. India produces both CTC and
Orthodox teas in addition to green tea. The weight age lies with
the former due to domestic consumers’ preference. Orthodox tea
production is balanced basically with the export demand.
Production of green tea in India is small. The competitors to India
in tea export are Sri Lanka, Kenya, China, Indonesia and Vietnam.

Tea is an agro-based commodity and is subjected to vagaries of


nature. Despite adverse agro climatic condition experienced in
tea growing areas in many years, Indian Tea Plantation Industry is
able to maintain substantial growth in relation to volume of Indian
tea production during the last one decade. There has been a
dramatic tilt in tea disposal in favour of domestic market since
fifties. While at the time of Independence only 79 M.Kgs or about
31% of total production of 255 M.Kgs of tea was retained for
internal consumption, in 2008 as much as 802 M.Kgs or about
82% of total production of 981 M.Kgs of tea went for domestic
consumption. Such a massive increase in domestic consumption
has been due to increase in population, greater urbanisation,
increase in income and standard of living etc.

Indian tea export has been an important foreign exchange earner


for the country. There was an inherent growth in export earnings
from tea over the years. Till 70s’, UK was the major buyer of
Indian tea Since 80s’ USSR became the largest buyer of Indian tea
due to existence of the trade agreement between India and
erstwhile USSR. USSR happened to be the major buyer of Indian
tea accounting for more than 50% of the total Indian export till
1991. However, with the disintegration of USSR and abolition of
Central Buying Mechanism, Indian tea exports suffered a setback
from 1992-93. However, Indian Tea exports to CIS countries
recovered from the setback since 1993 under Rupee Debt
Repayment Route facilities as also due to long term agreement on
tea entered into between Russia and India.

Depressed scenario again started since 2001 due to change in


consumption pattern, i.e. switch over from CTC to Orthodox as
per consumer preference and thus India has lost the Russian
market. Another reason for decline in export of Indian tea to
Russia is offering of teas at lower prices by China, South Asian
countries like Indonesia and Vietnam. The major competitive
countries in tea in the world are Sri Lanka, Kenya, China and
Indonesia. China is the major producer of green tea while Sri
Lanka and Indonesia are producing mainly orthodox varieties of
tea. Kenya is basically a CTC tea producing country.

While India is facing competition from Sri Lanka and Indonesia


with regard to export of orthodox teas and from China with regard
to green tea export, it is facing competition from Kenya and from
other African countries in exporting CTC teas. Because of absence
of large domestic base and due to comparatively small range of
exportable items, Sri Lanka and Kenya have an edge over India to
offload their teas in any international markets. This is one of the
reasons of higher volume of export by Sri Lanka and Kenya
compared to India. Another important point is that, U.K has
substantial interest in tea cultivation in Kenya. Most of the
sterling companies, after Indianisation due to implementation of
FERA Act started tea cultivation in Kenya. So, it makes business
sense for U.K. to buy tea from Kenya and Kenya became the
largest supplier of tea to U.K.

Tea is an essential item of domestic consumption and is the major


beverage in India. Tea is also considered as the cheapest
beverage amongst the beverages available in India. Tea Industry
provides gainful direct employment to more than a million
workers mainly drawn from the backward and socially weaker
section of the society. It is also a substantial foreign exchange
earner and provides sizeable amount of revenue to the State and
Central Exchequer. The total turnover of the Indian tea industry is
in the vicinity of Rs.9000 Crs.
Presently, Indian tea industry is having (as on 18.12.2009)
• 1692 registered Tea Manufacturers,
• 2200 registered Tea Exporters,
• 5848 number of registered tea buyers,
• Nine tea Auction centres.
Export Pattern
Production Pattern
India was the leading producer and consumer of tea in the world
till 2003. But China merged as the leading producer, which
accounted for 28.76% percent of global production in 2006
followed by India with 24.46 percent. The tea production in the
world increased from 29.56 lakh tonnes in 2000 to 36.49 lakh
tonnes in 2006. The corresponding increase in India's tea
production was from 8.37 lakh tonnes in 2000 to 8.92 lakh tonnes
in 2006.
Global Exports
World tea exports reached 16.15 lakh tonnes in 2004. Sri Lanka
was the largest exporter with 18.51% followed by China. Sri Lanka
accounted for 2.99 lakh tonnes valued at Rs. 3291.33. India was
the fourth major tea exporter with a volume of 1.75 lakh tonnes
shares around 10.82% earning a foreign exchange of Rs.1697.25
crores.
Country-wise export of tea during 2004
Quantity of export Value of export
Country
(lakh tonnes) % Rs. Crores %
Sri Lanka 2.99 18.51 3291.33 22.38
China 2.85 17.68 2088.98 14.20
Kenya 2.84 17.61 2083.59 14.17
India 1.75 10.82 1697.25 11.54
Vietnam 0.99 6.16 429.32 2.92
Indonesia 0.99 6.10 521.29 3.54
Argentina 0.68 4.20 182.03 1.24
Uganda 0.37 2.28 167.40 1.14
Malawi 0.33 2.03 177.19 1.20
UK 0.29 1.77 1163.76 7.91
Other Countries 2.07 12.84 2904.21 19.75
World 16.15 100.00 14706.35 100.00

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)

2001-02 1.80 1719.22


2002-03 1.83 1652.07
2003-04 1.78 1637.35
2004-05 1.83 1840.30
2005-06 1.58 1632.09

The following figure shows the export pattern of tea in terms of


quantity from India which shows a declining pattern over the
years from 2001-02 to 2005-06.

Russia was the largest importer of Indian tea (17.5%) followed by


UK (15.5%) and UAE (15.2%) and USA (7.31%) which together
accounted lion share of India's exports. In value terms also these
four countries accounted for more than half of India's tea export.

Country-wise export of tea shows that Russia was the major


destination with 0.28 lakh tonnes in 2005-06 (17.48%), followed
by UK and UAE with 15 per cent. The market share for USA and
Germany was seen to be higher in terms of value of exports in
contrast to volume of exports.
Country wise export of Tea from India during 2005-06
Quantity of export Value of export
Importing
Country (Lakh (Rs.
% %
tonnes) Crores
Russia 0.28 17.48 220.70 13.52
UK 0.25 15.80 222.20 13.61
UAE 0.24 15.16 239.57 14.68
USA 0.12 7.31 146.91 9.00
Kazakhstan 0.10 6.18 96.53 5.91
Iran 0.08 4.99 78.77 4.83
Germany 0.06 3.84 112.18 6.87
Pakistan 0.05 3.07 24.13 1.48
Australia 0.05 2.88 81.69 5.01
Saudi Arabia 0.04 2.72 39.26 2.41
Other countries 0.33 20.59 370.14 22.68
World 1.58 100.00 1632.09 100.00
The following pie chart shows the country-wise volume of export
of tea from India in 2005-06. The top four importers accounted for
55.75% of India's tea export.
Country-wise export of tea from India during 2005-
06
Russia
Others
17%
26%

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.

FUNCTIONS OF TEA BOARD OF INDIA


The Tea Board has wide functions and responsibilities under the
direction of the Central Government. Briefly the primary functions
of the Tea Board are as under:
a) Rendering financial and technical assistance for cultivation,
manufacture and marketing of tea.
b) Export Promotion
c) Aiding Research and Development activities for
augmentation of tea production and improvement of tea
quality.
d) Extend financial assistance in a limited way to the plantation
workers and their wards through labour welfare schemes.
e) To encourage and assist both financially and technically the
unorganised small growers sector.
f) Collection and maintenance of Statistical data and
publication.
g) Such other activities as are assigned from time to time by
the Central Government.
CONCLUSION
For the moment, Indian tea manufacturers are protected by a
large domestic market, which is relatively insensitive to price.
But, for the long-term health of the industry, it is important that
tea manufacturing companies, as well as, the plantations
companies have to gear up to increased competition. India will be
facing tough competition from Sri Lanka and Kenya, due to
factors like cost and productivity. India should make efforts to
move up the value chain to get better realizations.
Value additions through repositioning of tea, by changing the
product forms, packaging, delivery systems and promotional
policies, will help India increase its share in the export market.
The industry should also focus on cost competitiveness, higher
productivity and adherence to quality standards. The dependence
on the Russian market for exports should go down. The industry
also needs to work out a strategy for competing with its
traditional rival, coffee, and also the new rivals in the form of
carbonated drinks.
INDIAN COFFEE INDUSTRY
The coffee industry of India is the sixth largest producer of
coffee in the world, accounting for over four percent of world
coffee production, with the bulk of all production taking place in
its Southern states. India is most noted for its Monsooned Malabar
variety. It is believed that coffee has been cultivated in India
longer than anywhere outside of the Arabian Peninsula.
Indian coffee is the most extraordinary of beverages, offering
intriguing subtlety and stimulating intensity. India is the only
country that grows all of its coffee under shade. Typically mild
and not too acidic, these coffees possess an exotic full-bodied
taste and a fine aroma.

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.

Indian Coffee Exports to Gain


on Global Shortage
The year ahead looks promising for Indian coffee exports, both in
terms of volume and prices. The International Coffee Organisation
(ICO) has predicted that global coffee production during the 2009-
10 crop year might dip below the last year level of 128.1 million
bags. The global output this year may be down 2 per cent at 123-
125 million bags. One bag contains 60 kg coffee.
Adverse weather conditions in the major coffee growing countries
of Brazil, Vietnam and Colombia have hit production.
However, India may see a good harvest of around 300,000
tonnes, 16 per cent higher than last year. On the one hand, the
higher Indian output may boost exports, while on the other hand,
the supply may help fetch better prices internationally, according
to industry sources.
“India will be in an advantageous position. Production here is
comparatively good. So exports will sure be higher than last year.
Global prices will remain firm due to supply shortage. Hence,
India stands to gain,” said Babu Reddy, agricultural economist at
the Coffee Board.
India witnessed heavy rains, especially in the major coffee
growing state of Karnataka during October-November. However,
the rains are unlikely to have an adverse impact, and, in fact, may
hasten the ripening process of coffee beans, thereby controlling
the spread of berry borer and white stem borer. This may add to
crop prospects, according to Coffee Board Chairman GV Krishna
Rau.
During 2008-09, India produced 262,300 tonnes of coffee. For the
present crop year beginning October, the board has estimated an
output of around 306,300 tonnes — arabica at 101,525 tonnes
and robusta 204,755 tonnes. The crop will arrive in the market by
January.
The exact extent of crop damage due to rains will be revealed in
the board’s post-monsoon estimates, which is expected soon.
Only a marginal decline in output is expected.
Indian exports were hit by the global recession. During January 1-
December 8, 2009, the country exported 177,995 tonnes of
coffee, 16 per cent lower than last year.

Post monsoon estimation post blossom estimation


State 2008-09 2009-10

Arabica Robusta Total Arabica Robusta Total

Karnataka 61,135 122,725 183,860 79,720 141,755 221,475

Kerala 1425.00 55,775 57,220 1,375 58,175 59,550

Tamil
12070.00 4,185 16,225 14,850 4,700 19,550
Nadu

Others 4870.00 115 4,985 5,580 145 5,725

Total
79,500 182,800 262,300 101,525 204,775 306,300
(India)

Source: Coffee Board of India

According to ICO, while the output will be lower in Brazil, Vietnam


and Colombia, it may rise in Asia, Africa and Central America
production in Brazil, the world’s biggest coffee grower, is
estimated at 39 million bags in 2009-10 against 45.99 million
bags a year ago. Vietnam produced 16 million bags and Colombia
8.7 million bags in 2008-09.
Indian coffee is fetching around $1.4 a pound in the international
market. “In the short term, prices will remain firm at around $1.3-
$1.5. India exports nearly three-fourths of its production.
Domestic consumption has also been growing over the years, and
may soon reach 100,000 tons a year. Prices were also attractive,
said a grower, indicating that several growers, hit by the
reduction in global demand, planned to raise sales this year.
CONCLUSION
The only silver lining for the domestic market is that the next
coffee crop of 2000-01 in Brazil, the world’s largest producer, is
now expected to be 10 mn 60-kg bags short of the original
estimate of 42 mn bags. There is also a pressing need to expand
both the domestic and the international markets, in order to
ensure that the output is not wasted. Being a good producer of
Robusta, India can benefit from the rising global demand for
Robusta.
There is also a growing demand for decaffeinated coffee in the
world market. India is already in the process of developing `super'
coffee clones that are low in caffeine. Three indigenous species of
Arabica have been discovered which are low in caffeine. There is
a need to create a strong brand image for Indian coffee in the
global market. There is, therefore, a need to brand coffee in all
forms, be it bean, liquid or powder. In the domestic market, the
government has a proposal to initiate a programme for generic
promotion of coffee for a period of five years, which would help
improve domestic consumption levels.

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