Coffee hit by low rainfall, demonetisation

The Indian Coffee Board estimates 5.3 million bags of coffee production in the country for 2016-17.
A visitor checks coffee beans at the 'International Coffee Festival 2007' in the southern Indian city of Bangalore. (Reuters)
A visitor checks coffee beans at the 'International Coffee Festival 2007' in the southern Indian city of Bangalore. (Reuters)

KOCHI: The Indian Coffee Board estimates 5.3 million bags of coffee production in the country for 2016-17. According to the board, the drop in production compared to last year will only be 8.6 per cent.
But not only the shortfall in rain but the impact of demonetisation is set to impact production. Growers and players in the industry expect a drop of 15 per cent, with major growing areas seeing a fall of up to 60 per cent as demonetisation has also affected planters.

“Climate change has thrown a spanner into coffee production in Kodagu. The deficit in rain this year is nearly 50 per cent compared to last year... without sufficient rainfall, there will be drastic drop in production. The crop this year will be at least 60 per cent lower than last year,” said Sherry Subbaiah, Advisor, Skanda Coffee Company, Kodagu.

The US Department of Agriculture (USDA) expects indian coffee production to drop by 12.06 per cent. “Apart from adverse weather conditions, 2016-17 is an off-year for coffee crop as the previous year (2015-16) happened to be a bumper year with an all-time record highest crop,” says Coffee Board. Major coffee producers are Karnataka, Kerala and Tamil Nadu with small quantities are contributed by Andhra Pradesh, Odisha and the North East.
The production of Arabica variety coffee is pegged at 1.4 million bags and Robusta at 3.7 million bags for this year, said the USFDA.

Lower coffee production is expected because coffee yields in Karnataka, Tamil Nadu and Kerala are likely to be lower due to dry spell.
“Due to the hue and cry over demonetisation, no one now talks about sharp decline in North- East monsoon rainfall. Owing to this there will be 10-15 per cent drop in production,” pointed out Ramesh Rajah, President of the Coffee Exporters Association.
“Besides, demonetisation is also set to affect production since growers were not able to provide wages to workers for two weeks now. This will also affect the ultimate coffee output in India,”  he added.

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