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Delay in harvest likely to brew trouble for coffee crop output

Unseasonal rain in Karnataka, the biggest coffee producing state in the country, has hindered arabica coffee harvest, which normally starts by the end of November.

, ET Bureau|
Dec 12, 2019, 10.37 AM IST
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KOCHI: Delay in harvest due to unprecedented rains and uncertainty on export incentives may foil the efforts of Indian coffee exporters from capitalising on the rising global coffee prices. The global prices have recently started looking up with International Coffee Organisation projecting a shortage in the world coffee production due to unfavourable weather and reduced shipments from prolonged low international coffee prices. In 2018-19, poor crop and plunge in international prices had pulled down Indian coffee export by 9% over the previous year.

Unseasonal rain in Karnataka, the biggest coffee producing state in the country, has hindered arabica coffee harvest, which normally starts by the end of November. “This will have an adverse impact on the crop output, which we already expect to be 30 to 35% short because of drought and delayed monsoon this year,’’ said MB Ganapathy, chairman of Karnataka Planters’ Association.

Wet conditions, he said, can lead to a fungal infection resulting in poor quality of the coffee. “While in some regions the coffee beans are yet to mature, in other places rains are causing ripe berries to split, which if not plucked, fall to the ground,’’ he said. Coffee Board production estimate of arabica coffee in FY19 was 95,000 tonnes. However, the current weather pattern is not expected to affect plucking of robusta coffee beans, which is expected to begin by the middle of January.

In 2018-19, growers have reckoned that robusta, which accounted for about 70% of the total Indian coffee output, was short by 10 to 15 %.

Indian coffee exporters feel they may not be able to take advantage of the situation because of two reasons. “The crop is likely to be short and moreover the export incentives under merchandise export of India scheme (MEIS), will end by December 31. It looks like another bad year for coffee export,’’ said Ramesh Rajah, president, Coffee Exporters Association.

The MEIS is likely to be replaced next year by remission of duties or taxes on export product (RoDTEP), he said. “But we don’t know when will it be implemented,’’ he said. RoDTEP offers higher bank credit and insurance cover to exporters.

Rajah pointed out that as there would be a delay in the new arrivals reaching market, the export in the last quarter may be sluggish unlike FY 19 when shipments went up on higher carryover stock towards the end of the year.
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