The Hindu : Karnataka / Bangalore News : Meltdown hits coffee industry

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Monday, Nov 24, 2008
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Karnataka - Bangalore

Meltdown hits coffee industry

Special Correspondent

‘There are huge inventories with industries which have no takers’

BANGALORE: The next six months will be critical for Indian exporters, including coffee growers, Union Commerce Secretary Gopal K. Pillai said here on Saturday.

Speaking at the India Coffee Awards 2008, sponsored by the Coffee Board, he said: “The global financial crisis has not passed us by but is beginning to hit our industry. Indian exporters are either not getting enough orders or those who have already exported their products are faced with delays in getting payment from their customers in the west. This is a time when far-reaching policy changes may become necessary.” Mr. Pillai referred to the credit crunch faced by the industry and felt that banks had become reluctant to extend credit, and this would have to be rectified. The Centre had announced measures such as a back-up to support the Credit Guarantee Corporation, and he felt it might come out with a relief package to make sure industry had adequate liquidity at a critical time.

Yet another problem to be tackled was that of huge inventories with industries which now had no takers.

The gems industry was an example with $ 5 billion unsold gems, and they were unable to place any fresh orders. “It is a case of non-performing assets,” he added.

Sixteen growers of Arabica coffee, 16 growers of Robusta and 10 growers of speciality coffee were presented awards.

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