Indian coffee global perspectives

How do you rate Indian coffee?

Indian coffee plays different roles in different countries. As an exporter of approximately 3.3 million bags, it could be a filler in some markets, a speciality coffee in others and a 100% Indian coffee bean in some commercial ventures. India has been a very important but limited exporter of Washed Arabica.

The presence of Indian coffee is now more pronounced, thanks to the efforts of the Coffee Board to differentiate it. In Europe today, coffee sachets talk about the plantation from where they originate. Again, the consumer is more educated than 10 years ago.

Do people ask for Indian coffee at international outlets?

Yes, sometimes. Markets like Russia and the US recognise that Indian coffee exists. The consumer is now looking for better quality and for that growers need to rely on qualified people who can provide information and assistance on quality growing.

Which has two dimensions - an agricultural front and a promotional aspect. Indian coffee is gradually establishing an identity.

In the wake of the mid-1994 frost in the world's leading coffee-growing country, Brazil, and the subsequent boom in prices, many producing nations went about expanding cultivation in a big way. The impact was felt in the five-year period from 2000 when supply grew at the annual rate of 3.5% as compared to a demand growth of 1%.

The supply-demand equilibrium has now been restored and we could even see a deficit of 8 million bags in 2007-08. Growers need to focus on maintaining and renovating their estates and improving quality. However, the seeds of another crisis could be sown if growers ignore consumption trends.

What effect has the US re-entry into the ICO last year had on the global coffee scenario?

The effect has been very positive. The US realised the impact of the prolonged crisis from the year 2000 when growers could not meet the average cost of production due to a global surplus. Some 500,000 jobs were lost on the coffee estates in Mexico and Central America alone during this period.

There have been instances of a switch in some Latin American countries from coffee to coca. Coffee growers in Africa and Asia were also affected. The re-entry into the ICO of the world's biggest coffee-consuming country could have a positive and stabilising influence.

How do you see the imminent entry of Starbucks into India?

Coffee chains like Starbucks, Coffee Republic are reaching out to new markets. They have developed a niche that did not exist earlier. Which is good since it has enhanced the profile of coffee.

The impact may not be all that much in terms of volumes but the commodity visibility has increased. The coffee cafes are an effective display mechanism.

Is the ICO looking at the world's most populous country, China?

A few years ago, the ICO passed a formal resolution inviting China to join. Even if that doesn't happen in the short or medium term, the ICO has several promotional programmes designed to enhance coffee consumption in China.

Some of the big companies and coffee-cafe chains are already present in China where consumption is growing at the rate of 15% but from a modest base.

What is the share of producing countries in the world's coffee market?

The 1980s were the best period when the share of coffee-growing nations was estimated at $10 billion out of a global market of $30 billion.

At the height of the last crisis in 2003, the share of the producing nations slumped to below $ 6 billion out of a global market of $ 70 billion to 80 billion. The last few years has seen a recovery and producing nations could now be realising between $ 8.5 billion to $ 10 billion.

economictimes.indiatimes.com