role of tea and coffee in indian exports

8/14/2019 ROLE OF TEA AND COFFEE IN INDIAN EXPORTS

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ROLE OF TEA ANDCOFFEE IN INDIAN

EXPORTS AND

EARNING FOREIGNEXCHANGE

SUBJECT : EXPORT AND IMPORT

MANAGEMENT

SUBMITTED TO : PROF. DAVE

COLLEGE : BHAVANS COLLEGECLASS : S.Y. B.M.S. (B)

ACADEMIC YEAR : 2009-2010

(SEMESTER-IV)


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SUBMITTED BY:SWATI TIKKU 101

RITEN SAKHIYA 85JAIVEER DUGGAL 21

POOJA PATIL 76

JASBIR MAAN 50

SNEHAL RAMTEKKAR 82


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INTRODUCTIONIndian Economy grew by 5.4 per cent in 2001-02, which is

considered to be one of the highest growth rates in the world for

the year. This growth is supported by a growth rate of 5.7 percent in agriculture and allied sectors, 3.3 percent in industry and

6.5 per cent in services.

India is also exporting various commodities to various countries.

Some of the tangible goods exported by India are agricultural

items such as wheat, rice, Maize, pulses and many other food

grains. India is one of the leading producer and exporter of jute.

Jute is largely produced on the Ganga-Brahmaputra delta in WestBengal. Gems and Jewellery is another significant area of exports

for India.

Among its intangible exports ayurvedic medicines comprises a

major portion. Kerela is famous in this regard as it is attracting a

number of foreign tourists.India is earning considerable amount of

foreign exchange by its exports.

Tea and Coffee are significant items exported by India which isfetching a big amount of foreign exchange. Here is a detail study

of role of tea and coffee in Indian exports, its export pattern and

the foreign exchange earned by India by it.


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INDIAN TEA INDUSTRYThe tea industry in India is about 172 years old. It occupies an

important place and plays a very useful part in the nationaleconomy. Robert Bruce in 1823 discovered tea plants growing

wild in upper Brahmaputra Valley. In 1838 the firs Indian tea from

Assam was sent to United Kingdom for public sale. Thereafter, it

was extended to other parts of the country between 50's and 60's

of the last century. However, owing to certain specific soil and

climatic requirements its cultivation was confined to only certain

parts of the country.

Tea plantations in India are mainly located in rural hills and

backward areas of North-eastern and Southern States. Major tea

growing areas of the country are concentrated in Assam, West

Bengal, Tamil Nadu and Kerala. The other areas where tea is

grown to a small extent are Karnataka, Tripura, Himachal

Pradesh, Uttaranchal, Arunachal Pradesh, Manipur, Sikkim,

Nagaland, Meghalaya, Mizoram, and Bihar.

Unlike most other tea producing and exporting countries, India

has dual manufacturing base. India produces both CTC and

Orthodox teas in addition to green tea. The weight age lies with

the former due to domestic consumers preference. Orthodox tea

production is balanced basically with the export demand.

Production of green tea in India is small. The competitors to India

in tea export are Sri Lanka, Kenya, China, Indonesia and Vietnam.

Tea is an agro-based commodity and is subjected to vagaries ofnature. Despite adverse agro climatic condition experienced in

tea growing areas in many years, Indian Tea Plantation Industry is

able to maintain substantial growth in relation to volume of Indian

tea production during the last one decade. There has been a

dramatic tilt in tea disposal in favour of domestic market since

fifties. While at the time of Independence only 79 M.Kgs or about

31% of total production of 255 M.Kgs of tea was retained for

internal consumption, in 2008 as much as 802 M.Kgs or about82% of total production of 981 M.Kgs of tea went for domestic

consumption. Such a massive increase in domestic consumption


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has been due to increase in population, greater urbanisation,

increase in income and standard of living etc.

Indian tea export has been an important foreign exchange earner

for the country. There was an inherent growth in export earnings

from tea over the years. Till 70s, UK was the major buyer of

Indian tea Since 80s USSR became the largest buyer of Indian teadue to existence of the trade agreement between India and

erstwhile USSR. USSR happened to be the major buyer of Indian

tea accounting for more than 50% of the total Indian export till

1991. However, with the disintegration of USSR and abolition of

Central Buying Mechanism, Indian tea exports suffered a setback

from 1992-93. However, Indian Tea exports to CIS countries

recovered from the setback since 1993 under Rupee Debt

Repayment Route facilities as also due to long term agreement ontea entered into between Russia and India.

Depressed scenario again started since 2001 due to change in

consumption pattern, i.e. switch over from CTC to Orthodox as

per consumer preference and thus India has lost the Russian

market. Another reason for decline in export of Indian tea to

Russia is offering of teas at lower prices by China, South Asian

countries like Indonesia and Vietnam. The major competitivecountries in tea in the world are Sri Lanka, Kenya, China and

Indonesia. China is the major producer of green tea while Sri

Lanka and Indonesia are producing mainly orthodox varieties of

tea. Kenya is basically a CTC tea producing country.

While India is facing competition from Sri Lanka and Indonesia

with regard to export of orthodox teas and from China with regard

to green tea export, it is facing competition from Kenya and from

other African countries in exporting CTC teas. Because of absence

of large domestic base and due to comparatively small range of

exportable items, Sri Lanka and Kenya have an edge over India to

offload their teas in any international markets. This is one of the

reasons of higher volume of export by Sri Lanka and Kenya

compared to India. Another important point is that, U.K has

substantial interest in tea cultivation in Kenya. Most of the

sterling companies, after Indianisation due to implementation of

FERA Act started tea cultivation in Kenya. So, it makes business


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sense for U.K. to buy tea from Kenya and Kenya became the

largest supplier of tea to U.K.

Tea is an essential item of domestic consumption and is the major

beverage in India. Tea is also considered as the cheapest

beverage amongst the beverages available in India. Tea Industry

provides gainful direct employment to more than a millionworkers mainly drawn from the backward and socially weaker

section of the society. It is also a substantial foreign exchange

earner and provides sizeable amount of revenue to the State and

Central Exchequer. The total turnover of the Indian tea industry is

in the vicinity of Rs.9000 Crs.

Presently, Indian tea industry is having (as on 18.12.2009)

1692 registered Tea Manufacturers,

2200 registered Tea Exporters, 5848 number of registered tea buyers, Nine tea Auction centres.


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Export Pattern

Production Pattern

India was the leading producer and consumer of tea in the world

till 2003. But China merged as the leading producer, which

accounted for 28.76% percent of global production in 2006

followed by India with 24.46 percent. The tea production in the

world increased from 29.56 lakh tonnes in 2000 to 36.49 lakh

tonnes in 2006. The corresponding increase in India's tea

production was from 8.37 lakh tonnes in 2000 to 8.92 lakh tonnes

in 2006.

Global ExportsWorld tea exports reached 16.15 lakh tonnes in 2004. Sri Lanka

was the largest exporter with 18.51% followed by China. Sri Lanka

accounted for 2.99 lakh tonnes valued at Rs. 3291.33. India was

the fourth major tea exporter with a volume of 1.75 lakh tonnes

shares around 10.82% earning a foreign exchange of Rs.1697.25

crores.

Country-wise export of tea during 2004

CountryQuantity of export Value of export

(lakh tonnes) % Rs. Crores %

Sri Lanka 2.99 18.51 3291.33 22.38

China 2.85 17.68 2088.98 14.20

Kenya 2.84 17.61 2083.59 14.17

India 1.75 10.82 1697.25 11.54

Vietnam 0.99 6.16 429.32 2.92

Indonesia 0.99 6.10 521.29 3.54

Argentina 0.68 4.20 182.03 1.24

Uganda 0.37 2.28 167.40 1.14

Malawi 0.33 2.03 177.19 1.20

UK 0.29 1.77 1163.76 7.91

Other Countries 2.07 12.84 2904.21 19.75


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World 16.15 100.00 14706.35 100.00

The following pie chart shows the share of leading tea exportersin the world. Sri Lanka (18.51%), China (17.68%), Kenya (17.61%)

and India (10.82%) were the leading exporters with approximately

two-thirds of the global market share in 2004. The other countries

contributed 12.84 per cent of the world tea export. The following

pie diagram shows the market share of major tea exporting

countries during 2004.

Indias Export

India exported 1.58 lakh tonnes of tea valued at Rs.1632.09

crores in 2005-06. There has been a decline in India's tea exports

in 2005-06. The annual export from India was hovering around

1.80 lakh tonnes between 2001-02 and 2004-05. But 2005-06

witnessed 13.66% reduction in volume of export and 11.30%

reduction in export earnings.

Export of Tea from India during 2001-02 to 2005-06

YearQuantity

(lakhtonnes)

Value (Rs.Crores)

2001-02 1.80 1719.22

2002-03 1.83 1652.07


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2003-04 1.78 1637.35

2004-05 1.83 1840.30

2005-06 1.58 1632.09

The following figure shows the export pattern of tea in terms ofquantity from India which shows a declining pattern over the

years from 2001-02 to 2005-06.

Russia was the largest importer of Indian tea (17.5%) followed byUK (15.5%) and UAE (15.2%) and USA (7.31%) which together

accounted lion share of India's exports. In value terms also these

four countries accounted for more than half of India's tea export.

Country-wise export of tea shows that Russia was the major

destination with 0.28 lakh tonnes in 2005-06 (17.48%), followed

by UK and UAE with 15 per cent. The market share for USA and

Germany was seen to be higher in terms of value of exports incontrast to volume of exports.

Country wise export of Tea from India during 2005-06

ImportingCountry

Quantity of export Value of export

(Lakhtonnes)

%(Rs.

Crores%

Russia 0.28 17.48 220.70 13.52

UK 0.25 15.80 222.20 13.61

UAE 0.24 15.16 239.57 14.68


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USA 0.12 7.31 146.91 9.00

Kazakhstan 0.10 6.18 96.53 5.91

Iran 0.08 4.99 78.77 4.83

Germany 0.06 3.84 112.18 6.87

Pakistan 0.05 3.07 24.13 1.48

Australia 0.05 2.88 81.69 5.01

Saudi Arabia 0.04 2.72 39.26 2.41

Other countries 0.33 20.59 370.14 22.68

World 1.58 100.00 1632.09 100.00

The following pie chart shows the country-wise volume of export

of tea from India in 2005-06. The top four importers accounted for55.75% of India's tea export.

Country-wise export of tea from India during 2005-06

Organic TeaTotal world production of organic tea is estimated at around 9000tonnes in 2001 which represents less than 1% share of global teaproduction. India produced around 3150 tonnes of organic tea in2001 which accounts for one-third of the world production. India isnot only the pioneer but also one of the leading producers oforganic tea in the world.

Darjeeling has the largest number of estates under organiccultivation followed by Assam/ Dooars and South India. However,Oothu tea estate of Bombay Burmah Trading Corporation (BBTC)in South India is the single largest organic tea producer in the

Russia

17%

U.K

16%

U.A.E.

15%U.S.A

7%Kazakhstan

6%

Iran

5%

Germany

4%

Pakistan

3%

Others

26%


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country and also one of the largest organic gardens in the world,producing around 1000 tonnes of organic tea annually.

To support and strengthen the globally recognized organicmovement, the producers of organic tea in India formed theIndian Bio Organic Tea Association (IBOTA) in 1996. FAO fundedmodel organic farms have also been planned to establish Assam

and Darjeeling in North-East and Valparai in South India.


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TEA BOARD OF INDIATea is one of the industries, which by an Act of Parliament comesunder the control of the Union Govt. The genesis of the Tea Board

India dates back to 1903 when the Indian Tea Cess Bill waspassed. The Bill provided for levying a cess on tea exports - theproceeds of which were to be used for the promotion of Indian teaboth within and outside India. The present Tea Board set up undersection 4 of the Tea Act 1953 was constituted on 1st April 1954. Ithas succeeded the Central Tea Board and the Indian TeaLicencing Committee which functioned respectively under theCentral Tea Board Act, 1949 and the Indian Tea Control Act, 1938which were repealed. The activities of the two previous bodies

had been confined largely to regulation of tea cultivation andexport of tea as required by the International Tea Agreement thenin force, and promotion of tea Consumption.

FUNCTIONS OF TEA BOARD OF INDIA

The Tea Board has wide functions and responsibilities under thedirection of the Central Government. Briefly the primary functionsof the Tea Board are as under:

a) Rendering financial and technical assistance for cultivation,manufacture and marketing of tea.

b) Export Promotionc) Aiding Research and Development activities for

augmentation of tea production and improvement of teaquality.

d) Extend financial assistance in a limited way to the plantationworkers and their wards through labour welfare schemes.

e) To encourage and assist both financially and technically the

unorganised small growers sector.f) Collection and maintenance of Statistical data and

publication.g) Such other activities as are assigned from time to time by

the Central Government.


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CONCLUSIONFor the moment, Indian tea manufacturers are protected by alarge domestic market, which is relatively insensitive to price.

But, for the long-term health of the industry, it is important thattea manufacturing companies, as well as, the plantationscompanies have to gear up to increased competition. India will befacing tough competition from Sri Lanka and Kenya, due tofactors like cost and productivity. India should make efforts tomove up the value chain to get better realizations.

Value additions through repositioning of tea, by changing theproduct forms, packaging, delivery systems and promotionalpolicies, will help India increase its share in the export market.

The industry should also focus on cost competitiveness, higherproductivity and adherence to quality standards. The dependenceon the Russian market for exports should go down. The industryalso needs to work out a strategy for competing with itstraditional rival, coffee, and also the new rivals in the form ofcarbonated drinks.


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INDIAN COFFEE INDUSTRYThe coffee industry of India is the sixth largest producer ofcoffee in the world, accounting for over four percent of world

coffee production, with the bulk of all production taking place inits Southern states. India is most noted for its Monsooned Malabarvariety. It is believed that coffee has been cultivated in Indialonger than anywhere outside of the Arabian Peninsula.

Indian coffee is the most extraordinary of beverages, offeringintriguing subtlety and stimulating intensity. India is the onlycountry that grows all of its coffee under shade. Typically mildand not too acidic, these coffees possess an exotic full-bodiedtaste and a fine aroma.

Indian coffee has a unique historic flavour too! It all began with along, arduous journey around four hundred years ago... when thelegendary saint Bababudan brought seven magical beans fromdistant Yemen and planted them in the Chandragiri hills ofKarnataka. The sensations of aroma, flavour, body and aciditythat you enjoy with each coffee experience is rooted in thesemystical beginnings.

It is often said, the Indian coffee grower pours his life into thecrop. Is it any wonder then that India has consistently producedand exported a remarkable variety of high-quality coffees for overone hundred and fifty years!

According to latest ICO monthly report, world consumption in2006 is estimated at 117.93 mn bags compared with 116.06 mnbags. While ICO member countries' domestic consumption in2006 is estimated at little over 31 mn bags, the importingcountries consumption is estimated at 86.84 mn bags. European

Community's consumption is higher at 85.75mn bags comparedwith 38.97mn bags in 2005. India accounts for about 4.5 percentof world coffee production and the industry provides employmentto 6 lakh people. Among the coffee growing states, Karnatakaaccounts for 70 percent of country's total coffee productionfollowed by Kerala (22 percent) and Tamil Nadu (7 percent).Europe accounts for about 70 percent of India's total coffeeexports. Of this again, 70 percent is shipped via Suez Canal. MajorIndian coffee importing countries include Italy, Germany, Russian

federation, Spain, Belgium, Slovenia, US, Japan, Greece,Netherlands and France.


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COFFEE: AN SIGNIFICANTEXPORT COMODITY

COFFEE BOARD OF INDIAThe Coffee Board of India is an autonomous body, functioningunder the Ministry of Commerce and Industry, Government ofIndia. The Board focuses on research, development, extension,quality upgradation, market information, and the domestic andexternal promotion of Indian coffee.

Research and DevelopmentThe Coffee Board conducts basic and applied research on coffee

and can boast of 75 glorious years in coffee research. TheResearch Department publishes various journals and periodicals.It also offers various services to growers and exporters.

The Board also encourages the consumption of coffee in India andabroad. Towards this end, the Board participates in food andBeverage exhibitions abroad. The Board also runs 14 India CoffeeHouses in the country. The India Coffee House brand of coffeepowder is well known in India for its quality and aroma.

The Board has for long years worked on the quality of Indian

coffee. The Board runs two quality control laboratories inBangalore and Hassan, which control and advise the industry onquality issues. The labs are equipped with the best roasting andbrewing machines. The best cup- tasters and quality evaluatorskeep a strict vigil on the pre and post harvest processes with aview to ensure that the quality of Indian coffee is maintained.

Economic & Market Intelligence UnitThe Board has an Economic & Market Intelligence Unit functioning

from its head office at Bangalore. The unit undertakes variousactivities related to market information & intelligence, marketresearch studies, crop forecasting and coffee economics aspects.

The unit also undertakes studies on research related to the coffeetrade including WTO issues. Notable publications include the dailymarket intelligence report, a comprehensive database on coffee(Bimonthly) and market intelligence report (Quarterly). Theperiodical reports that are already completed included CoffeeConsumption in Urban India 2001 and Coffee Consumption in

India 2003. The unit is currently coordinates a study on logisticsand competitiveness of coffee producing countries (India, Vietnam& Brazil) and a manual on coffee retailing.


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EXPORT PATTERNIndia is one of the leading exporters of coffee and its exporting

coffee to various parts of the world. India is earning considerableamount of foreign exchange through export of coffee. Thestatistics are as under:

Exports of Coffee from India by Countries FY

2007/2008 *(Quantity, Percentage and Unit Value)

No DestinationQuantity

(In MT)

% to

Total

Unit Value

Rs/Tonne

1 ITALY 53804 24.57 88567

2 RUSSIAN FEDERATION 25183 11.50 100657

3 GERMANY 14236 6.50 101695

4 BELGIUM 10615 4.85 94201

5 SPAIN 8802 4.02 81100

6 FINLAND 7914 3.61 92434

7 GREECE 5470 2.50 80084

8 SLOVENIA 5400 2.47 77728

9 CROATIA 5011 2.29 83261

10 UKRAINE 4943 2.26 106486

11 JORDAN 4813 2.20 11045612 SWITZERLAND 4797 2.19 105858

13 U.S.A. 4304 1.97 94086

14 SINGAPORE 4207 1.92 83073

15 KUWAIT 3906 1.78 15049

16 FRANCE 3875 1.77 92893

17 HUNGARY 3572 1.63 86853

18 PORTUGAL 3387 1.55 81446

19 AUSTRALIA 3195 1.46 94776

20 NETHERLANDS 2858 1.30 9186721 ISRAEL 2734 1.25 87345

22 LIBYA 2416 1.10 80343

23 MALAYSIA 2386 1.09 82735

24 JAPAN 2158 0.99 96297

25 LATVIA 2055 0.94 107371

26UNITED ARAB

EMIRATES1539 0.70 121617

27 POLAND 1518 0.69 91208

28 SAUDI ARABIA 1398 0.64 116296

29 EGYPT 1373 0.63 8684530 TAIWAN 1306 0.60 83415

31 CANADA 1289 0.59 87299


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32 CHINA, PEOPLES R/O 1173 0.54 78812

33 ROMANIA 1100 0.50 79440

34 TURKEY 1080 0.49 121071

35 UNITED KINGDOM 1047 0.48 105321

36 ESTONIA 929 0.42 103950

37 NORWAY 873 0.40 91627

38 SOUTH AFRICA 846 0.39 13561839 AUSTRIA 799 0.36 74991

40 VIETNAM 791 0.36 83685

41 ALGERIA 727 0.33 74945

42 MYANMAR 639 0.29 76844

43 KENYA 576 0.26 92198

44 KOREA, PEOPLES R/O 543 0.25 82658

45 OTHERS 7414 3.39 106102

TOTAL 218996 100.00 93569

*provisional (includes re-exports)


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FOREIGN EXCHANGE EARNEDTHROUGH COFFEE

Foreign exchange earned through exports of coffee from Indiafailed to touch Rs 2,000 crore mark in the coffee year endedSeptember 2009 despite higher price realisation for thecommodity at the global level. Exports stood at 1.81 lakh tonne,fetching foreign exchanges of around Rs 1,970 crore, according toprovisional figures released by the Coffee Board.

Consumption of coffee across the world increased in the past twoyears despite the economic slowdown, pushing prices at analarming rate last year. But India failed to cash in on owing to

lower production, said an official of the Coffee Board. The unitvalue of Indian coffee at international market increased to Rs 1.09lakh per tonne in 2008-09 from Rs 1.05 lakh in the previous year.

According to state-owned Coffee Board, India earned foreignexchange of Rs 2,328 crore in the coffee year ended September2008, up by 23% from Rs 1,892 crore in the previous year.Although, exports in the 2007-08 crop year was almost flat at2,20,030 tonne compared to previous year's 2,19,796 tonne,higher price in the global markets helped realisation in the 2007-

08 crop year to cross Rs 2,000 crore mark for the first time.

As coffee prices continued to soar, the government anticipatedthat foreign exchange through coffee exports would surpass Rs2,500 crore in 2008-09 crop years. However, the target was notachieved, as erratic rains dragged down production. CoffeeBoard's post-blossom estimate for 2008-09 had stood at awhopping 2.93 lakh tonne, but it fell to 2.62 lakh tonne during thepost-monsoon estimation. In fact the area covered under coffeeplantation increased to 3, 94,352 hectares in 2008-09, up from3,88,195 hectares in the previous year, but production wasalmost flat at 2.62 lakh tonne.

The dip in exports in 2008-09 was mainly due to decline in importby Italy and Russia, the top two coffee importers from India.Exports to Italy declined to 35,104 tonne in 2008-09 from 53,539tonne while exports to Russia tumbled to 13, 308 tonne from 23,309 tonne. Exports to Germany, the third top coffee customer ofIndia, also declined to 9,024 tonne from 15,503 tonne while

exports to Belgium declined to 7,073 tonne from 11,195 tonne.However, growers and exporters feel that exports will revive inthe current crop year that starts on October 1, 2009, as the


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production is likely to pick up. According to post-blossomestimates of the Coffee Board, output in 2009-10 will be around3,06,300 tonne, of which Arabica output will be at 101,525 tonneand robusta at 2,04,775 tonne.

Indian Coffee Exports to Gain

on Global ShortageThe year ahead looks promising for Indian coffee exports, both interms of volume and prices. The International Coffee Organisation(ICO) has predicted that global coffee production during the 2009-10 crop year might dip below the last year level of 128.1 millionbags. The global output this year may be down 2 per cent at 123-125 million bags. One bag contains 60 kg coffee.

Adverse weather conditions in the major coffee growing countriesof Brazil, Vietnam and Colombia have hit production.

However, India may see a good harvest of around 300,000tonnes, 16 per cent higher than last year. On the one hand, thehigher Indian output may boost exports, while on the other hand,the supply may help fetch better prices internationally, accordingto industry sources.

India will be in an advantageous position. Production here iscomparatively good. So exports will sure be higher than last year.

Global prices will remain firm due to supply shortage. Hence,India stands to gain, said Babu Reddy, agricultural economist atthe Coffee Board.

India witnessed heavy rains, especially in the major coffeegrowing state of Karnataka during October-November. However,the rains are unlikely to have an adverse impact, and, in fact, mayhasten the ripening process of coffee beans, thereby controllingthe spread of berry borer and white stem borer. This may add tocrop prospects, according to Coffee Board Chairman GV KrishnaRau.

During 2008-09, India produced 262,300 tonnes of coffee. For thepresent crop year beginning October, the board has estimated anoutput of around 306,300 tonnes arabica at 101,525 tonnesand robusta 204,755 tonnes. The crop will arrive in the market by

January.

The exact extent of crop damage due to rains will be revealed inthe boards post-monsoon estimates, which is expected soon.

Only a marginal decline in output is expected.


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Indian exports were hit by the global recession. During January 1-December 8, 2009, the country exported 177,995 tonnes ofcoffee, 16 per cent lower than last year.

StatePost monsoon estimation

2008-09

post blossom estimation

2009-10

Arabica Robusta Total Arabica Robusta Total

Karnataka 61,135 122,725 183,860 79,720 141,755 221,475

Kerala 1425.00 55,775 57,220 1,375 58,175 59,550

TamilNadu

12070.00 4,185 16,225 14,850 4,700 19,550

Others 4870.00 115 4,985 5,580 145 5,725

Total

(India)79,500 182,800 262,300 101,525 204,775 306,300

Source: Coffee Board of India

According to ICO, while the output will be lower in Brazil, Vietnamand Colombia, it may rise in Asia, Africa and Central Americaproduction in Brazil, the worlds biggest coffee grower, isestimated at 39 million bags in 2009-10 against 45.99 millionbags a year ago. Vietnam produced 16 million bags and Colombia8.7 million bags in 2008-09.

Indian coffee is fetching around $1.4 a pound in the internationalmarket. In the short term, prices will remain firm at around $1.3-$1.5. India exports nearly three-fourths of its production.Domestic consumption has also been growing over the years, andmay soon reach 100,000 tons a year. Prices were also attractive,said a grower, indicating that several growers, hit by thereduction in global demand, planned to raise sales this year.


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CONCLUSIONThe only silver lining for the domestic market is that the nextcoffee crop of 2000-01 in Brazil, the worlds largest producer, is

now expected to be 10 mn 60-kg bags short of the originalestimate of 42 mn bags. There is also a pressing need to expandboth the domestic and the international markets, in order toensure that the output is not wasted. Being a good producer ofRobusta, India can benefit from the rising global demand forRobusta.

There is also a growing demand for decaffeinated coffee in theworld market. India is already in the process of developing `super'coffee clones that are low in caffeine. Three indigenous species of

Arabica have been discovered which are low in caffeine. There isa need to create a strong brand image for Indian coffee in theglobal market. There is, therefore, a need to brand coffee in allforms, be it bean, liquid or powder. In the domestic market, thegovernment has a proposal to initiate a programme for genericpromotion of coffee for a period of five years, which would helpimprove domestic consumption levels.

role of tea and coffee in indian exports

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