Lok Sabha Question No. 4710 (UNSTARRED), answered on 2021-03-24
Subject: Decline in Coffee Prices
Ministry: COMMERCE AND INDUSTRY
Asked by: Prajwal Revanna

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 4710 TO BE ANSWERED ON 24 th MARCH, 2021

## DECLINE IN COFFEE PRICES

## 4710.  SHRI PRAJWAL REVANNA

Will the Minister of COMMERCE & INDUSTRY ( वािण�य एवं उ�ोग मं�ी ) be pleased to state:

- (a) whether the Government is aware of the double whammy of unseasonal rains in the midst of a harvesting season due to which falling of coffee berry from trees and falling prices of coffee has made the farmers worry about their crops in Kodagu (Coorg), Chikmagalur and Sakleshpur in Hassan - a major coffee-growing region;
- (b) if so, the details thereof ;
- (c) the steps taken by the Government for the welfare of coffee planters; and
- (d) the details of export potential and coffee production in Karnataka?

## ANSWER

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THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (SHRI HARDEEP SINGH PURI)

(a) & (b): During the month of December 2020 and January 2021, there was heavy rainfall in the coffee growing areas of Karnataka, causing loss to the coffee crop.

The domestic price of coffee is dependent on international market prices and local factors. As per the International Coffee organization (ICO), the annual average of the composite indicator price declined by 15.23% to 107.94 US cents/lb in 2020 compared to annual average composite indicator price of 127.34 US cents/lb during 2016. As per the International Coffee Organization, surplus production during the last five years is mainly responsible for the low prices.However, during the last four months, the monthly average ICO composite indicator price is showing upward trend from 109.70 US cents/lb in Nov ember 2020 to 119.35 US cents/lb during February 2021.

(c):  The Coffee Board is implementing the Integrated Coffee Development Project under which various interventions  such  as  research  &  development,  technology  transfer,  capacity  building,  support  to mechanization of estates, coffee area development, market development, support to  value addition etc. are undertaken for the overall improvement of production, productivity and quality of coffee. Financial support  is  also  provided  to  small  growers/SHGs/Cooperatives  for  marketing  of  coffee  on  community basis.Coffee Board is also providing advisory service on production related aspects to the coffee growers through Field Force Mobile App and soil fertility through Kaapi Soil Health Monitoring and Management ( KSHEMAM ) web -portal . During the last three years i.e. 2017-18 to 2019-20,the Coffee Board has  provided  financial  assistance  amounting  to  Rs.107.98  crore  towards  various  components  of  the Scheme.

(d):  The details of the total coffee production in Karnataka durin g last three years and current year are as under:

*Post Monsoon Estimate

| Year     |   Production in Karnataka (Qty. in MT) |
|----------|----------------------------------------|
| 2017-18  |                                 222300 |
| 2018-19  |                                 219550 |
| 2019-20  |                                 203445 |
| 2020-21* |                                 242300 |

Source: Coffee Board

The  Indian  coffee  is  primarily  an  export-oriented  commodity  with  over  75%  of  the  annual production being exported. Karnataka is the leading producer of coffee in India with a share of about 70% in total production. Indian coffee has created a niche in the international market as high quality coffees and there is an increase in demand for Indian coffees in the international market. The Indian Arabicas earn premiums under 'Other Milds' category and Indian Robust as are rated as the best in the  world.  The  premium  for  Indian  Arabicas  reached  peak  during  2020  earning  about  40  US cents/lb(about 30% increase) over Inter Continental Exchange (ICE) New York price.

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