According to the United States Department of Agriculture (USDA), India's coffee production and consumption will rise in the crop year 2021-22 (October 2021-September 2022). As per the recent report, coffee output for 2021-22 will be 5.53 million bags of 60 kg each, or 3.31 lakh tonnes more than last year's 5.23 million bags.
According to the report, production for 2021-22 will be 76,800 tonnes of Arabica and 225000 tonnes of Robusta. According to USDA output estimates, Arabica yields will fall by 2%, while Robusta yields will rise by 9%. Overall yields are expected to increase by 6% to 789 kg per hectare over last year, according to the report.
“Unseasonal rains in November are expected to negatively impact Arabica crop yields and delay harvest by at least two weeks, which will be offset by higher Robusta yields, resulting in a 6% increase in overall coffee yields,” according to the USDA India Post.
Coffee farmers and the trade anticipate a lower arabica crop as a result of the recent rains. The apex growers body, the Karnataka Planters Association, recently predicted a 30% drop in Arabica output for 2021-22.
The USDA estimates are significantly lower than the Coffee Board's initial or post-bloom estimates for Arabica, which are 108,300 tonnes and 260,700 tonnes, respectively. The Board has yet to release the Post-Monsoon estimate, which takes into account the impact of rain and monsoon.
Domestic Consumption:
In addition, the report predicts that domestic coffee consumption will be 1% higher in 2021-22, at 1.21 million 60 kg bags. Soluble coffee sales primarily drive at-home consumption through e-commerce and retail channels. The gradual reopening of the hospitality (hotels, restaurants, catering events) and institutional (corporate offices, airports) sectors will support the increase in at-home consumption.
“Robust sales during the pandemic last year prompted a number of regional coffee processors/retailers to pursue and expand their footprint in new cities, as well as explore new retail channels (other than traditional retail stores) with broader product offerings,” the company said.
Household consumption of soluble coffee will most likely account for a much larger share (65%) of domestic consumption over the next year. Rising energy costs, which affect raw material processing costs as well as other expenses such as packaging, freight, and logistics, pose a significant challenge to suppliers in the short term.
According to trade sources, both domestic and international coffee prices will remain high for the next 6-12 months due to rising freight costs (due to shipping delays). According to trade sources, the cost of shipping a container to European destinations has increased sevenfold since last year. There are also more cancellations by carriers when booking space on vessels, as well as significant delays in transit times.
