Required Report - public distribution

**Date:** 11/9/2004

**GAIN Report Number:** IN4121

IN4121

**India**

**Coffee**

**Semi-Annual**

**2004**

**Approved by:**

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

U.S. Embassy, New Delhi

**Prepared by:**

A. Govindan

**Report Highlights:**

While maintaining the MY 2004/05 coffee production forecast at 290,000
tons (4.8 million bags), the share of Arabica has increased, offset by
lower Robusta production. For the first time, Starbucks has contracted
to buy Indian coffee.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Semi-Annual Report

New Delhi \[IN1\]

\[IN\]

**Production**

Although Post continues to forecast MY 2004/05 (Oct-Sep) total coffee
production at 290,000 tons (4.8 million bags of 60 kilograms), the share
of Arabica is now forecast higher at 115,000 tons (1.9 million bags),
versus lower Robusta production, currently forecast at 175,000 tons (2.9
million bags). Based on Indian Coffee Board data, the 2003/04 estimate
has been revised upward to 270,500 metric tons (4.5 million bags),
comprising 101,950 metric tons (1.7 million bags) of Arabica and 168,550
metric tons (2.8 million bags) of Robusta. The PS&D Table has been
revised to reflect this revision.

**Trade**

Coffee exports in MY 2003/04 are now estimated higher at 226,341 metric
tons following increased exports in the second half of the MY, and are
forecast at the same level in MY 2004/05. CY 2003 coffee exports were
revised marginally upward to 222,425 tons.

**Marketing**

Starbucks has reportedly entered into an agreement with an Indian coffee
company, Tata Coffee, for sourcing coffee beans from India. This is the
first time that Starbucks is buying coffee from India. Hamid Ashraff,
Managing Director, Tata Coffee was quoted as saying "Starbucks deal with
Tata Coffee is yet another significant milestone to show how Indian
coffee is gaining acceptance in the international market." India's share
of world coffee production and exports is around 4 percent.

# Policy

India is back on the Executive Board of the International Coffee
Organization. According to the Chairman, India Coffee Board, "This will
provide India with an opportunity to have a say on important decisions
taken by the organization." She further added that the United States'
decision to join the ICO will give a new dimension to the initiative of
the organization for resolving the ongoing coffee crisis.

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

+-----------------+----------+-----+---+-----+---+-----+-------------+
| **PSD Table**   |          |     |   |     |   |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| **Country**     | ####     |     |   |     |   |     |             |
|                 | ## India |     |   |     |   |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Commodity       | *        |     |   |     |   |     |             |
|                 | *Coffee, |     |   |     |   |     |             |
|                 | Green**  |     |   |     |   |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
|                 |          | **  |   | **  |   | **  | UOM         |
|                 |          | 200 |   | 200 |   | 200 |             |
|                 |          | 3** |   | 4** |   | 5** |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
|                 | Old      | New | O | New | O | New |             |
|                 |          |     | l |     | l |     |             |
|                 |          |     | d |     | d |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Market Year     |          | 1   |   | 1   |   | 1   | MM/YYYY     |
| Begin           |          | 0/2 |   | 0/2 |   | 0/2 |             |
|                 |          | 002 |   | 003 |   | 004 |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Area Planted    | 349      | 349 | 3 | 355 | 3 | 355 | (1000 HA)   |
|                 |          |     | 5 |     | 5 |     |             |
|                 |          |     | 5 |     | 5 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Area Harvested  | 323      | 323 | 3 | 328 | 3 | 320 | (1000 HA)   |
|                 |          |     | 2 |     | 2 |     |             |
|                 |          |     | 0 |     | 0 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Bearing Trees   | 555      | 555 | 5 | 550 | 5 | 550 | (MILLION    |
|                 |          |     | 5 |     | 5 |     | TREES)      |
|                 |          |     | 0 |     | 0 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Non-Bearing     | 65       | 65  | 7 | 70  | 7 | 70  | (MILLION    |
| Trees           |          |     | 0 |     | 0 |     | TREES)      |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| TOTAL Tree      | 620      | 620 | 6 | 620 | 6 | 620 | (MILLION    |
| Population      |          |     | 2 |     | 2 |     | TREES)      |
|                 |          |     | 0 |     | 0 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Beginning       | 831      | 831 | 6 | 748 | 5 | 294 | (1000 60 KG |
| Stocks          |          |     | 9 |     | 8 |     | BAGS)       |
|                 |          |     | 5 |     | 8 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Arabica         | 1702     | 1   | 1 | 1   | 1 | 1   | (1000 60 KG |
| Production      |          | 702 | 6 | 700 | 7 | 920 | BAGS)       |
|                 |          |     | 6 |     | 5 |     |             |
|                 |          |     | 7 |     | 0 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Robusta         | 2886     | 2   | 2 | 2   | 3 | 2   | (1000 60 KG |
| Production      |          | 886 | 6 | 800 | 0 | 920 | BAGS)       |
|                 |          |     | 6 |     | 8 |     |             |
|                 |          |     | 7 |     | 5 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Other           | 0        | 0   | 0 | 0   | 0 | 0   | (1000 60 KG |
| Production      |          |     |   |     |   |     | BAGS)       |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| TOTAL           | 4588     | 4   | 4 | 4   | 4 | 4   | (1000 60 KG |
| Production      |          | 588 | 3 | 500 | 8 | 840 | BAGS)       |
|                 |          |     | 3 |     | 3 |     |             |
|                 |          |     | 4 |     | 5 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Bean Imports    | 0        | 51  | 0 | 0   | 0 | 0   | (1000 60 KG |
|                 |          |     |   |     |   |     | BAGS)       |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Roast & Ground  | 0        | 0   | 0 | 0   | 0 | 0   | (1000 60 KG |
| Imports         |          |     |   |     |   |     | BAGS)       |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Soluble Imports | 0        | 2   | 0 | 0   | 0 | 0   | (1000 60 KG |
|                 |          |     |   |     |   |     | BAGS)       |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| TOTAL Imports   | 0        | 53  | 0 | 0   | 0 | 0   | (1000 60 KG |
|                 |          |     |   |     |   |     | BAGS)       |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| **TOTAL         | **5419** | **  | * | **  | * | **  | (1000 60 KG |
| SUPPLY**        |          | 547 | * | 524 | * | 513 | BAGS)       |
|                 |          | 2** | 5 | 8** | 5 | 4** |             |
|                 |          |     | 0 |     | 4 |     |             |
|                 |          |     | 2 |     | 2 |     |             |
|                 |          |     | 9 |     | 3 |     |             |
|                 |          |     | * |     | * |     |             |
|                 |          |     | * |     | * |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Bean Exports    | 2852     | 2   | 2 | 3   | 2 | 3   | (1000 60 KG |
|                 |          | 852 | 5 | 013 | 9 | 000 | BAGS)       |
|                 |          |     | 0 |     | 2 |     |             |
|                 |          |     | 0 |     | 9 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Roast & Ground  | 1        | 1   | 1 | 1   | 1 | 1   | (1000 60 KG |
| Exports         |          |     |   |     |   |     | BAGS)       |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Soluble Exports | 700      | 700 | 7 | 750 | 7 | 750 | (1000 60 KG |
|                 |          |     | 5 |     | 5 |     | BAGS)       |
|                 |          |     | 0 |     | 0 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| TOTAL Exports   | 3553     | 3   | 3 | 3   | 3 | 3   | (1000 60 KG |
|                 |          | 553 | 2 | 764 | 6 | 751 | BAGS)       |
|                 |          |     | 5 |     | 8 |     |             |
|                 |          |     | 1 |     | 0 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Rst,Ground Dom. | 986      | 986 | 1 | 1   | 1 | 1   | (1000 60 KG |
| Consum          |          |     | 0 | 000 | 0 | 005 | BAGS)       |
|                 |          |     | 0 |     | 0 |     |             |
|                 |          |     | 0 |     | 5 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Soluble Dom.    | 185      | 185 | 1 | 190 | 1 | 195 | (1000 60 KG |
| Consum.         |          |     | 9 |     | 9 |     | BAGS)       |
|                 |          |     | 0 |     | 5 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| TOTAL Dom.      | 1171     | 1   | 1 | 1   | 1 | 1   | (1000 60 KG |
| Consumption     |          | 171 | 1 | 190 | 2 | 200 | BAGS)       |
|                 |          |     | 9 |     | 0 |     |             |
|                 |          |     | 0 |     | 0 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| Ending Stocks   | 695      | 748 | 5 | 294 | 5 | 183 | (1000 60 KG |
|                 |          |     | 8 |     | 4 |     | BAGS)       |
|                 |          |     | 8 |     | 3 |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+
| **TOTAL         | **5419** | **  | * | **  | * | **  | (1000 60 KG |
| DISTRIBUTION**  |          | 547 | * | 524 | * | 513 | BAGS)       |
|                 |          | 2** | 5 | 8** | 5 | 4** |             |
|                 |          |     | 0 |     | 4 |     |             |
|                 |          |     | 2 |     | 2 |     |             |
|                 |          |     | 9 |     | 3 |     |             |
|                 |          |     | * |     | * |     |             |
|                 |          |     | * |     | * |     |             |
+-----------------+----------+-----+---+-----+---+-----+-------------+