Rains to dampen coffee production.

KOCHI: Domestic coffee production is likely to decline by eight per cent in the current fiscal mainly due to lack of timely rains, the government said on Monday.

“It has been estimated that there is a likelihood of decline in coffee production in 2016-17 by 8 per cent compared to that in 2015-16 due to lack of timely rains and high temperature during the crucial flowering stage,” Commerce and Industry Minister Nirmala Sitharaman said in the Lok Sabha.

The main buyers of Indian coffee are Italy, Russian Federation, Germany, Belgium and Turkey which account for over 50 per cent of coffee exports from India.

The Coffee Exporters Association have represented before the Department of Commerce for adding green coffee beans to the exempted list in the proposed Goods and Services Tax (GST) and “the matter is under consideration,” she noted.

The Minister also said that the proposal to repeal the Coffee Act, 1942, is “no longer serving the purpose”.

“Over the years, the role of Coffee Board has changed and many provisions of the existing Act have become redundant, especially after abolition of Coffee Pooling System in 1996,” she said. adding that it has been proposed to repeal the law enacted 70 years ago and enact a new legislation — Coffee Bill, 2016.

Sitharaman said of the total coffee growing areas in the world, only 2 per cent are in India but they produce 4 per cent of the world’s total coffee production and 90 per cent of Indian coffee is exported.

United Planters’ Association of Southern India (UPASI) commodities’ head Sanjit R Nair said that due to high temperature, coffee production would decrease in 2016-17. “There will be an impact on domestic prices. At present 70 per cent of coffee produced in India is being exported. The price of coffee is largely determined by domestic factors,” he added.

Source : newindianexpress.com