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Voluntary Report - public distribution

**Date:** 11/17/2003

**GAIN Report Number:** IN3112

IN3112

**India**

**Coffee**

**Report**

**2003**

**Approved by:**

![](media/image1.wmf)Chad R. Russell

U.S. Embassy, FASNEWDELHI

**Prepared by:**

A. Govindan

**Report Highlights:**

MY 2003/04 coffee production is forecast at 4.6 million bags, unchanged
from the 2002/03 level. Although coffee exports increased marginally in
MY 2002/03, export values were lower. Coffee consumption in CY 2003 is
estimated higher at 70,300 tons. The government is considering various
measures to protect the interest of coffee growers.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Unscheduled Report

New Delhi \[IN1\]

\[IN\]

# Production 

According to the Coffee Board's post blossom forecast, India's MY
2003/04 (Oct-Sep) coffee production will be 275,225 metric tons (4.6
million bags of 60 kg), which included 106,500 tons (1.8 million bags)
of arabica and 168,725 tons (2.8 million bas) of robusta, 5,000 tons
below Post's pre-blossom forecast. The 2003/04 production remained more
or less unchanged from the 2002/03 production of 275,275 tons (4.6
million bags), which included 102,125 tons (1.7 million bags) of arabica
and 173,150 (2.9 million bags) robusta. A prolonged drought in the prime
growing areas in Karnataka this summer, combined with insufficient or
delayed blossom showers, negatively impacted production. Poor plant
management in response to lower returns to growers and increased
incidents of white stem borer also contributed to lower yields.

# Consumption

# 

According to a recent coffee consumption survey sponsored by the Coffee
Board, coffee consumption has surged to 70,300 tons in CY 2003 from a
static level of around 60,000 tons in recent years. About 70 percent of
the coffee consumption occurs in urban areas, mostly in southern states.

# 

# Trade

Coffee exports in MY 2002/03 increased marginally to 213,190 tons from
206,470 tons in 2001/02. However, export values were lower at \$230
million, compared with \$240 million in 2001/02, reflecting lower
international prices. Exports in MY 2003/04 are likely to be lower at
200,000 tons, due to static production combined with increasing domestic
consumption.

# Policy 

The government of India (GOI) is considering the possibility of
augmenting the size of the rs. 5 billion (\$110 million) Price
Stabilization Fund (PSF) by seeking access to funds from the World Bank
and other multilateral agencies. The GOI created the PSF in 2003/04
federal budget with a view to providing price stability to small growers
of coffee, tea, and rubber. The fund included rs. 4.83 billion as a
one-time contribution by the GOI and rs.170 million from a one-time
membership fee from participating growers at the rate of rs. 500 per
participant. The interest earned from this fund would be used to provide
financial support to participating farmers at the rate of rs. 1,000 per
grower for ten years. However, in view of the meager protection the fund
provides, not many growers are reported to be interested in this
program.

The Coffee Board is planning to launch a risk management instrument for
coffee growers beginning next year to insulate them from global price
fluctuations. The scheme is being developed in collaboration with the
Commodity Risk Management Group of the World Bank.

**Table 1: Commodity, Coffee Green, PSD Table**

  ------------------ ----------- ------------- ---------- ------------- ---------- ------------- --------------
  **PSD Table**                                                                                  

  **Country:**       **India**                                                                   

  **Commodity:**     **Coffee,                                                                   
                     Green**                                                                     

                                 **2002**                 **2003**                 **2004**      UOM

                     Old         New           Old        New           Old        New           

  **Market Year                  **10/2001**              **10/2002**              **10/2003**   (MONTH/YEAR)
  Begin**                                                                                        

  Area Planted       347         347           349        349           349        349           (1000 HA)

  Area Harvested     321         321           323        323           323        323           (1000 HA)

  Bearing Trees      550         550           555        555           555        555           (1000 TREES)

  Non-Bearing Trees  65          65            65         65            65         65            (1000 TREES)

  TOTAL Tree         615         615           620        620           620        620           (1000 TREES)
  Population                                                                                     

  Beginning Stocks   363         363           831        831           1063       695           (1000 60 KG
                                                                                                 BAGS)

  Arabica Production 2018        2018          1702       1702          1750       1775          (1000 60 KG
                                                                                                 BAGS)

  Robusta Production 2992        2992          2886       2886          2910       2812          (1000 60 KG
                                                                                                 BAGS)

  Other Production   0           0             0          0             0          0             (1000 60 KG
                                                                                                 BAGS)

  TOTAL Production   5010        5010          4588       4588          4660       4587          (1000 60 KG
                                                                                                 BAGS)

  Bean Imports       0           0             0          0             0          0             (1000 60 KG
                                                                                                 BAGS)

  Roast & Ground     0           0             0          0             0          0             (1000 60 KG
  Imports                                                                                        BAGS)

  Soluble Imports    0           0             0          0             0          0             (1000 60 KG
                                                                                                 BAGS)

  TOTAL Imports      0           0             0          0             0          0             (1000 60 KG
                                                                                                 BAGS)

  **TOTAL SUPPLY**   **5373**    **5373**      **5419**   **5419**      **5723**   **5282**      (1000 60 KG
                                                                                                 BAGS)

  Bean Exports       2689        2689          2500       2852          2800       2582          (1000 60 KG
                                                                                                 BAGS)

  Roast & Ground     1           1             1          1             1          1             (1000 60 KG
  Exports                                                                                        BAGS)

  Soluble Exports    752         752           700        700           750        750           (1000 60 KG
                                                                                                 BAGS)

  TOTAL Exports      3442        3442          3201       3553          3551       3333          (1000 60 KG
                                                                                                 BAGS)

  Rst,Ground Dom.    925         925           970        986           980        1000          (1000 60 KG
  Consum                                                                                         BAGS)

  Soluble Dom.       175         175           185        185           190        200           (1000 60 KG
  Consum.                                                                                        BAGS)

  TOTAL Dom.         1100        1100          1155       1171          1170       1200          (1000 60 KG
  Consumption                                                                                    BAGS)

  Ending Stocks      831         831           1063       695           1002       749           (1000 60 KG
                                                                                                 BAGS)

  **TOTAL            **5373**    **5373**      **5419**   **5419**      **5723**   **5282**      (1000 60 KG
  DISTRIBUTION**                                                                                 BAGS)
  ------------------ ----------- ------------- ---------- ------------- ---------- ------------- --------------