The Executive Director of the International Coffee Organization (ICO), Nestor Osorio, urged coffee producers to focus attention on increasing yields by “promoting renovation of existing coffee plantations.”

He was speaking at the inauguration of the three-day India International Coffee Festival (IICF) here on Wednesday.

Speaking to The Hindu, Dr. Osorio said international coffee prices were likely to remain firm in the next coffee year (October-September) because demand and supply were “evenly balanced.” “The average price is now in tune with market fundamentals,” he remarked.

Dr. Osorio said coffee growers across the world had been adversely affected by the spike in fertilizer prices and the sharp devaluation of the U.S. dollar vis-a-vis the currencies of producer countries. “The price recovery has been nullified by the dollar’s slide,” he said.

Global output

The ICO estimates that international coffee output in the 2008-09 season to be about 128-130 million bags (of 60 kg each), roughly equal to the demand amounting to 130 million bags. Dr. Osorio said the only inventory of coffee was the stocks of about 25 million bags in the hands of the consuming segment at ports. Chairman of the Coffee Board G. V. Krishna Rau said that although India’s share in exports was only four per cent, the diversity and quality of Indian supplies “offer a relative advantage and unique opportunity to growers.” Indian output of coffee in the 2009-10 season is likely to touch 3 lakh tonnes, from 2.62 lakh tonnes in the previous year.

Mr. Rau said there was an “urgent need” to develop coping strategies to deal with the impact of climate change. Heavy and unseasonal rains, coupled with uncertain weather, have caused significant crop damage to the coffee crop in successive years since 2006, he pointed out. V.G. Siddhartha, Chairman, ABC Trading, urged the industry to invest in coffee processing technology so that productivity could be increased. The festival was inaugurated by S. V. Ranganath, Chief Secretary, Government of Karnataka.