PRODUCTIONThe traditional states for coffee production are Karnataka, Kerala and Tamil Nadu, all in South India. Karnataka is where the crop was first grown in India, in the 17th century, and continues to be the heartland of Indian coffee culture. These three states account for 98% of national coffee production – almost all of Indian robusta and 94% of Indian arabica.

Most of the coffee area in these states can be traced down along the Western Ghats mountain range. Karnataka coffee production extends through Chikmagalur, Hassan, and Coorg districts. Further south, Kerala production is concentrated in Wyanad and Travancore districts, while Tamil Nadu coffees grow mostly in Pulneys and the Nilgiris blue mountains, the southernmost end of the Western Ghats.

Recently, arabica coffee production has expanded in Andhra Pradesh and Orissa, along the Eastern Ghats mountain range. There is also arabica production in the North Eastern region (the “seven sisters” states) between Bangladesh and Myanmar. These two regions only account for 6% of Indian arabica production.

India produces around 5.5 mio bags every season, of which arabica comprises around one-third and robusta around two-thirds. Arabica has a greater cost of production than robusta, as more disease control is needed, and scarcity/expense of labour is often cited as a problem nowadays.

ORIGIN: INDIA 1

‘In this month’s CBS&A issue, we take a closer look at India, the world’s fifth largest coffee producing country. We hope you enjoy reading about a very unique coffee-growing culture! ’

Bopanna C P, Trading Director, ED&F Man Commodities India Pvt. Ltd.

INDIA AT A GLANCE:Population:

1.24 biopeople

GDP per capita:

$1,489Export share of GDP:

25%Coffee share of exports:

0.1%Employment in agriculture:

51%Coffee Production:

5.5 miobags

Coffee Hectarage:

405,000 ha

(2011 data: Coffee Board of India, World Bank, Volcafe)

COFFEE GROWING REGION OF INDIA

Traditional Area

Non-Traditional Area

Arabian Sea

Bay of Bengal

Tamil Nadu

Karnataka

Kerala

ORIGIN: INDIAJanuary 2013

Official statistics show a small growth in both robusta and arabica areas, but large robusta green exports, and field observations, are suggesting that more farmers have switched from arabica to robusta than is officially stated. This is possible in the areas where optimal conditions of arabica and robusta overlap.

Productivity of robusta is around half of the average yield in Vietnam, primarily due to cultivation in shade-grown conditions and older lower-yielding varieties. Farmer knowledge of good agricultural practices is excellent, with technical assistance from the Coffee Board of India.

India cultivates almost all of its coffee under a shade canopy. No other coffee-producing country has such a high level of shade-grown coffee. Nearly fifty different types of trees are found in coffee plantations. Shade trees suppress extreme temperature

fluctuations in the plantation, protect soil moisture and structure, and encourage biodiversity.

Many coffee farms back on to huge swathes of national parks. The Bhadra, Western Ghats, and Bandipur Wildlife Sanctuaries are just some of the national parks near the coffee areas. Elephants and their smaller colleagues, deer, live in close proximity to farms, and sometimes wander in. Any human visitors to Indian coffee farms are struck by how coffee farms are integrated into the forest landscape. Intercropping is common, with pepper and other spices often grown on the shade trees. Around 99% of Indian coffee farms are smaller than ten hectares.

PROCESSINGThere are two post-harvest methods on farms; wet-processing that produces “Parchment” coffee, and dry-processing that produces “Cherry” coffee. Of the arabica, 60-70% is washed, whereas

in the case of robusta 15-20% is washed. These commercial grades are then categorised according to screen size, into AA/A/B/C etc. India is also famous for “Monsooned” coffees. Dry-processed arabica or robusta are warehoused in the Western port of Mangalore, during the summer months of the monsoon. The beans swell in the humid air and their colour fades to a pale straw yellow. The coffee is repacked at frequent intervals, and the entire process takes three to four months.

THE INDIAN CUPIndian arabicas are well-balanced, mild coffees. The light body, low acidity and subtle and unique spicy notes in both washed and unwashed arabicas are pleasing. They have a slightly dry mouth feel, and work well under a wide range of roasts. The Monsooned coffee is a different story altogether. Potent, pungent and wild, these are great for those who like strong deep complex flavours. Wet-processed ‘parchment robusta’ is sweet with a hint of spice, very soft and with intense body. Dry processed ‘cherry robusta’ is very clean, a touch herbal with nutty notes. It also has boldly intense body. We consider them among the top robustas. Italy is by far the largest market for Indian green arabicas and robustas, with Italians appreciating their unique cup.

DOMESTIC CONSUMPTIONAnnualised growth of domestic consumption of coffee in India has been around 5% in the last decade. The per capita consumption of coffee in India is one of the lowest in the world at around 100 grams, primarily due to the pricing; 10 US cents for a cup of tea vis-à-vis 65 US cents for a cup of coffee!

VOLCAFE IN INDIAIndia figures significantly in the history of Volcafe, as Volkart Brothers started their first coffee venture here, in 1857. ED&F Man Volcafe once again started coffee operations in India in May 2011 and have completed one season. With plans afoot to increase our presence, our young dynamic team is looking forward to a bright future in India’s coffee world.

2 ORIGIN: INDIA Disclaimer: Any comments or opinions in this report are not intended to be an offer to buy or sell commodities or futures and options thereon as they merely state our views and carry no guarantee as to their accuracy. ©2013 VOLCAFE LTD.

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