Indian coffee output seen hit by pests, rains

India's coffee output in the year to September 2006 is likely to be about five percent lower than an earlier estimate of 294,000 tonnes because of pest attacks and excess rainfall, the head of the state-run Coffee Board said on Monday.
"There are two factors which may have a bearing on our estimates, one is the pest white stem borer and the other is heavy rains in July and August," the board's chairman, G.V. Krishna Rau, told a planters' conference in southern India.
"I expect 5 percent damage because of heavy rains."
He said in some parts of southern Karnataka state there had been 15 to 20 percent damage due to excessive rains.
Rau said the coffee board was yet to take into account the damage caused by the pests. "It will have some impact but at the moment it is difficult to say how much."
The board will come out with its post monsoon estimate in October.
Rau said global prices of arabica coffee were unlikely to fall below 90 cents a lb because of a supply shortage of 8 million bags (of 60 kg each) in the international market.
"The present level of 90 cents an lb should continue until July and August."
But global output is expected to rise in the year to September 2006 with higher production in Vietnam and Brazil.
"The next crop will be higher by 8 to 10 million bags and buyers have no reason to pay a higher price," the official said.
He said India's coffee production was continuously falling after hitting 300,000 tonnes in 2001/02 because of depressed prices and lack of fresh investment.
"A prolonged depressed price scenario made growers cash-strapped and unable to make required investments in farms to sustain production."
He said the Indian coffee industry was facing new challenges as consumers were becoming increasingly quality conscious. "Buyers are looking for value added coffees, speciality coffees, estate brand coffees, organic coffees and eco-friendly coffees."
"Even in the domestic market the change is visible in the last few years."
He said Indian coffee growers will have to produce quality coffee at a competitive price to survive in the market.