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Rediff.com  » Business » Rains in south India take the steam out of coffee

Rains in south India take the steam out of coffee

September 05, 2018 17:53 IST

Crop loss would the highest in Karnataka (where a little more than 75 per cent of the national output comes from), followed by Kerala and Tamil Nadu.

The Coffee Board, under the Union ministry of commerce, has estimated crop loss of 82,000 tonnes due to heavy rain in the traditional growing areas of South India.

 

Industry representatives say this will not impact prices, given these are based on what is happening abroad, where supply is presently more than demand.

Board officials say it would be difficult to achieve the earlier post-blossom estimate of 350,400 tonnes for 2018-19, unless the December season sees a big jump in cultivation.

The estimate based on harvest data for 2017-18 is 316,000 tonnes - comprising 95,000 tonnes Arabica and 221,000 tonnes Robusta.

The Board says the crop loss would the highest in Karnataka (where a little more than 75 per cent of the national output comes from), followed by Kerala and Tamil Nadu.

Landslides have also been reported from the Kodagu region in Karnataka, affecting about 1,500 hectares of coffee area; also some minor landslides elsewhere in Karnataka and in Kerala.

Board officials say the rain was heavier on Robusta plantation areas.

Growers’ associations have been asking for rescheduling of debt payment and reduction in the interest rate for crop loans to three per cent for loans up to ~2.5 million, and six per cent for a higher amount. This is justified, says the board.

“The board believes the compensation paid under the Calamity Relief Fund through the state governments under the National Disaster Management Plan will not be sufficient to recoup the losses due to the continuous and unprecedented rain during the current southwest monsoon season. Hence, a special package may please be considered by the Government of India,” it has stated.

Prices abroad, as mentioned, are down. Arabica stagnates at $98.95 cents a pound on the Intercontinental Exchange, the company that owns the New York Stock Exchange.

At the London International Financial Futures and Options Exchange, Robusta has dropped to $1,606 a tonne from the earlier $1,621 a tonne.

Photograph: Jagadeesh Nv/Reuters

T E Narasimhan in Chennai
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