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Millennium Post

Wake up & smell African coffee

Consumption of coffee within India has doubled over the last decade. This exciting new trend of increased domestic demand is occurring in many coffee producing nations including Brazil and China. Increasing awareness and appreciation of Indian coffee has been fuelled by dramatic improvements in the quality of Indian coffees. The key drivers are innovative and dynamic plantation owners who have broken into increasingly lucrative export markets, notably for speciality coffee beans which can be worth more than double a standard coffee bean.

Specialty coffee beans are high quality coffees which can be distinguished from standard beans by precise origin sourcing, quality of cultivation, preparation, outstanding processing and finally careful branding. Specialty coffees are increasingly sought out in the world’s coffee market. Consumers both in India and globally are demanding the best coffee and India is one of the nations leading this move.

Coffee was first grown in India in the Chikkamagaluru (previously known as Chikmagalur) district when the first coffee trees were planted in the Baba Budan Giri Hills about 300 years ago. India produces both the Arabica and Robusta varieties of coffee beans.
 Indian coffee production has remained fairly static at about 3.5 per cent of world’s total production however, India’s coffee exports have more than doubled from 2.3 per cent of world total (1,09,000 metric tonnes in 1992-1993) to 5.16 per cent (3,24,000 metric tonnes in 2011-2012). India’s footprint on the global coffee stage is growing. This success together with increased domestic demand has created a shortfall and as a result, India needs to bring in replacement beans from its nearest long established trading source. Southern and Eastern Africa and India have traded successfully for centuries. Africa is the birthplace of the coffee tree and as a result, the coffee trade between India and Africa is growing. Africa produces a plethora of varieties, origins and types given the numerous countries and regions where it can be found.

The exact extent of the coffee trade between India and Africa is difficult to quantify very precisely as much of the trade is routed by multinational trade houses via their parent offices in Europe or South East Asia. Traditionally India has imported the lower grade raw or green Robusta and Arabica coffees for use in her growing soluble (instant coffee) industry. Whilst, there are soluble industrial plants in East Africa the high cost of cross border or intra African trade means African businesses finds it easier to process this coffee in India. Indian soluble plants are much more modern and highly efficient. Furthermore, most of the Indian coffee imported into Africa is in the soluble or instant form. Very minor quantities of raw (green) coffees are exported into much of Africa, with the exception of Tunisia.

The average quality of general African coffee remains broadly unchanged. There has been substantial improvement in the quality of production in certain countries such as Malawi and Rwanda. This lucrative industry provides significant employment in coffee producing countries. For example, it is estimated that six million Kenyans are employed directly or indirectly in the coffee industry, which is about 15 per cent of the total population. Coffee is also a major provider of foreign exchange to many of these countries which was historically significant as it enabled imports of vital products such as fuel oil. There has also been an explosion in coffee culture in Africa’s capital cities which is happening amongst the youth, students, and growing middle-class. This is already been seen in India and China.

The land use or acreage for growing coffee in Africa remains broadly unchanged although the end of civil war in Angola is bound to bring back land into use. Whereas in Kenya, coffee plantations are being converted into real estate for development of large new satellite cities. While there are relatively large coffee plantations the vast majority of coffee grown is done by small holders or so-called peasant farmers. These farmers are organised into cooperative movements which are pushing the move towards ‘certified coffees’. These are coffees grown under programmes such as Organic, Rainforest Alliance and Fairtrade.

More recently these plantations are being bought by the large coffee trading companies. However, such investments may become less attractive due to comparatively high costs of production in Africa for reasons such as lack of water and high power costs. This is no longer sustainable as over the last year world coffee prices have fallen by 40 per cent due to market forces.

As coffee culture grows worldwide and the specialist coffee market develops to produce coffee connoisseurs, world trade in coffee will continue to increase. The most exciting areas for this growth include India and Africa as they have an excellent balance of high volume coffees produced for the mass market and specialist fine coffees which are continuously developing.
Conceived by Kalyan Mukherjee,
Consulting Editor, AfricaResearch by Aman Ramrakha
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