‘India’s coffee crop could shrink 33%’

Hit by extreme weather events of drought and floods during the year in the key producing State of Karnataka, India’s coffee crop for the 2019-20 season, starting october, could shrink by a third over last year, growers said.

“The heavy and continuous rain from August to October in the plantation districts of Chikmagalur, Kodagu and Hassan had caused landslides, floods, marooning and had washed away coffee plantations, damaging infrastructure and triggering berry droppings. According to preliminary estimates, production is expected to be down by at least 30-35 per cent,” said MB Ganapathy, Chairman, Karnataka Planters Association (KPA), on Monday.

Karnataka accounts for 70 per cent of the coffee produced in the country.

In 2018-19, coffee output stood at 3.19 lakh tonnes, comprising of 95,000 tonnes of arabica and 2.24 lakh tonnes of robusta, according to the Coffee Board.

Ganapathy said the arabica output could shrink further to around 70,000 tonnes this year. Apart from heavy rains, the are-up in infestation of the dreaded white stem borer (WSB) in the early part of the year hit arabica plantations hard, hurting output. Moreover, the area under arabica has been dwindling by about a tenth a year, he said. Apart from coffee, growers have also suffered losses in pepper, grown as an inter crop, due to excess rain.

Ganapathy said crisis in the plantation sector intensied during the year as growers continue to reel under the impact of rising input costs, low prices and freak weather patterns, which hurt output.

“Rainfall across key regions was in excess of 50 per cent over normal,” said Shirish Vijayendra, Vice-Chairman, KPA, adding that the number of rainy days is getting reduced.

About 1,600 hectares of plantations were damaged by rains last year, while an equal area, is believed to have been impacted by the unprecedented rains this year. The formal assessment of the damage caused by the rains is yet to be complete and planters are seeking a compensation of 18 lakh per acre for the losses suffered.

“About 8-10 per cent of the total plantation area has been lost due to landslides and flooding witnessed in the past two years,” said AL RM Nagappan, President, The United Planters Association of South India.

“The losses suffered by coffee infrastructure and the revenue loss cannot be recovered. While some relief has been provided for the crop loss, growers have not been compensated for the land loss,” said Ganapathy.

Theplantation sector has suffered two consecutive years of drought and two years of floods in the past four years. No major relief has been announced and Government has not come to the rescue, he said..

Ganapathy said the Centre should address the issues faced by the plantation sector, on which over 5 lakh people are dependent for their livelihoods, and come to their rescue to make the industry sustainable. Planters are also seeking waiver of interest on all outstanding coffee crop loans as on March 31, 2019.

Arabica coffee futures on ICE fell to their lowest level in more than 13 years

Arabica coffee futures on ICE fell to their lowest level in more than 13 years on Tuesday as the market continued to struggle to absorb excess supplies.

May arabica coffee was down a quarter of a cent, or 0.3 per cent, at 91.85 cents per lb by 1205 GMT after dipping to 91.25 cents, the weakest for the front month since December 2005.

Dealers said speculators were extending net short positions against the backdrop of excess supplies. One dealer noted that Brazil would start to harvest a large arabica crop next month even though it is an off-year in its biennial crop cycle.

Coffee exports earnings turn tepid as poor volumes take toll

After touching an all time high in 2017-18, Indian coffee shipments suffered a setback during the year-ended March 31, 2019 as a poor crop impacted volumes exported during the fiscal year.

Volumes were down by about 9 per cent over the previous year, impacting overall realisations both in rupee and dollar terms. The dollar term realisation was down by about a tenth, while the rupee earnings were lower by about 3 per cent. However, per-unit realisations went up for the period on account of an increase in instant coffee shipments, exporters said.

“There was little coffee to ship,” said Ramesh Rajah, President of the Coffee Exporters Association, attributing the poor performance to the lower crop during the past two years.

“The outlook for the year-ahead looks bleak as the current (2018-19) crop is lower,” Rajah added.

In Brazil Heatwave, Coffee is Literally Burning on the Trees

After abundant rain in the second half of last year that boosted optimism for the crop, robusta-coffee areas in Espirito Santo got only 5 millimeters (0.2 inches) in January, trailing the 150-millimeter average for the month, according to Somar.

The main issue, though, is the scorching heat, with temperatures reaching as high as 37 degrees Celsius. Plants full of forming cherries have been getting as many as nine hours a day of temperatures above 30 degrees, Celso Oliveira, a meteorologist at Somar in Sao Paulo, said by telephone.

Espirito Santo and Bahia account for more than 80 percent of Brazil’s robusta-coffee crop. Southern Bahia state has been hardest hit.

"In Bahia, crop conditions are terrible as they don’t have irrigation to ease plant stress," Gabriel's Calegari said.