According to USDA, consumption in India has been hovering around 1.2 million bags for last 5 years; slipped to 1.1 mn bags in 2012-13

India’s coffee consumption is set recover to 1.2 million bags (72,000 tonnes) in 2013-14, a modest rise of nine per cent compared with 1.1 million bags (66,000 tonnes) in 2012-13, according to the United States Department of Agriculture (USDA). Before falling in 2012-13, average annual consumption in India stood at about 1.2 million bags through five consecutive years, USDA said in its latest report ‘Coffee: World Markets and Trade’.

Typically, USDA’s estimate is lower than the estimate provided by the Coffee Board of India, which is yet to publish the latest consumption figures. “Consumption of coffee in India is always debatable. The Coffee Board of India always projects a higher number, while it is low in the case of USDA,” said Ramesh Rajah, president, Coffee Exporters Association of India. Coffee consumption in India is growing at an average one-two per cent annually.

Compared to 2012-13, consumption has shown signs of growth. It is estimated consumption would rise despite near-flat production levels. USDA has pegged domestic coffee bean production at 5.2 million bags (312,000 tonnes) for the crop year starting October. On an average, India’s annual bean production stood at 5-5.2 million bags in the past three years.

For 2013-14, USDA has projected exports from India at 3.75 million bags, the same as that recorded last year. Of the estimated production of 5.2 million bags this year, the share of Arabica is pegged at a record high of 1.7 million, while that of Robusta is pegged at 3.5 million bags.

“World coffee production in 2013-14 is forecast at 146 million bags, down by 4.4 million bags from the previous year, primarily due to Brazil’s Arabica trees entering the ‘off-year’ of the biennial production cycle and, to a lesser extent, Central America and Mexico continuing to struggle with coffee leaf rust,” USDA said. Global bean exports are pegged below last year’s record, while consumption is expected to rise modestly.

“In India, higher input costs, along with the elimination of subsidies for fertilisers and diesel, have increased production costs for growers. Labour expenses, which could account for more than 50 per cent of the cost of cultivation, continue to escalate, while greater off-farm employment opportunities have created labour shortages,” USDA said.

Adoption of mechanisation has been slow and limited to a few plantations, primarily due to uneven terrain and small and fragmented growing areas.

source: http://www.business-standard.com / Business Standard / Home> Markets> Commodities> Food & Edible Oils / by Mahesh Kulkarni / Bangalore – July 15th, 2013