Exporting Coffee..........
HS Code : 09012290
Coffee is one of the world’s most widely traded commodities. And going by official figures, India too seems to have gathered a fair amount of expertise in its trade! What’s more? Despite the ongoing slump in overall exports, the country managed to ship out 63% of its production last year and a significant part of that to Italy, the Mecca of coffee!
A hot cup of coffee is what many people in the world begin the day with. And not without reason, the caffeine content in the beverage stimulates one’s mind and prepares one to face the day with what the french call joie de vivre [a delight in being alive]. Coffee is an immensely popular beverage across the globe, and has a fascinating history. According to the National Library of France, the earliest documented reference of coffee can be traced to 875 AD! It is believed that in the olden days, coffee was grown exclusively in Ethiopia from where it gradually made its way to the Arabian Peninsula. Thereafter, coffee farming continued to spread far and wide, and today it is farmed in more than 50 countries across Central and South America, Africa and Asia. Variety is the essence as far as taste is concerned – coffee can be heavy or full-bodied, mild, bitter or sweet.
Coffee is big business, and we are not just talking about the ubiquitous cafes. As per estimates, over 100 million people are currently engaged in coffee production and processing. Interestingly, US is home to the world’s largest number of coffee consumers, yet produces coffee only in small quantities. In fact, most of the coffee production takes place in the middle of the world – along the equator and in the subtropical areas. The warm, humid climate in this belt is perfect for coffee plantation. In other words, the global trade flow of one of the most “valuable” commodities in the world is currently directed from the less privileged (or not so rich) countries to the more privileged (or rich) ones. The revenues generated thereof are contributing to alleviate poverty and improve living standards in these exporting countries, thus helping reduce the global economic inequality – a noble cause served by a commodity, you would agree!
Coffee is not native to India. Legend has it that the 17th Century Indian sufi saint Baba Budan had smuggled seven raw coffee beans out of Yemen while returning from his pilgrimage, and planted them on Chandragiri Hill (now named after him as Baba Budangiri) in the Chikkamagaluru district of Mysore. This was the first ever coffee plantation in India, and all that subterfuge because the Arabs exercised strict control over coffee exports and had banned coffee beans to be exported to other lands in any form, other than the roasted or boiled, to prevent germination. That is legend, but India today is home to a wide range of coffees, 13 distinct varieties to be precise. And this can be attributed to the success of British entrepreneurs in conquering the hostile forest terrains of South India to usher an era of commercial coffee production. By 1840, India was producing enough to start exporting.
The taste of coffee depends on the type of beans and the process of roasting and brewing.
The coffee that is cultivated in India though is different from the one cultivated in Latin America. Unlike anywhere else in the world, Indian coffee is grown under a canopy of thick natural shade rather than direct sunlight. The main growing regions – Western and Eastern Ghats – are ecologically sensitive and have been identified as one of the world’s 25 biodiversity hotspots. This contributes significantly to not just conservation of their unique biodiversity, but also helps generate employment opportunities for workers residing in these hilly terrains of the southern states of Karnataka, Kerala and Tamil Nadu. Incidentally, these states contribute to about 99% of India’s total coffee production.
With its low acid content, Indian coffee is mild with a full-bodied taste and fine aroma. The 13 variants include scintillating Arabicas and Robustas, as well as specialty coffees like Robusta Kappi Royale (India’s flagship washed Robusta brand) and Mysore Nuggets that represent the finest coffee from India. Over time, South India has become a centre of filtered coffee, which is strong in taste and has to be diluted with plenty of milk. So essentially, Indian coffee is not like its western counterparts – for milk is an indispensable portion of the Indian coffee mug. And in recent years, coffee consumption has surged in the northern part of India too.
The Indian coffee chain market stood at Rs.1,820 crore in 2014 and is likely to reach Rs.5,430 crore by 2020.
Coffee producers though still remain dependent on exports for sustenance. Millions of people worldwide prefer Indian coffee. Sourced from 13 distinct coffee growing regions of India and nourished by many different soils, each type of coffee is unique – in taste and flavour. While each variety has been well-received in the overseas markets, Indian Robusta in particular is highly sought after for its good blending quality. Significantly, Indian coffee, especially the espresso blend, is nowadays very popular in Europe. Indian Arabica coffee is also savoured by many, as it tends to be low-toned, subtle and rounder as compared to the brighter, more acidic varieties grown in South America and Africa.
The current export trends also substantiate the shift. India, today, has become the third largest coffee exporter to Italy (world’s third largest importer of coffee), after Brazil and Vietnam. “India is the world’s only country that produces a very high quality Robusta coffee which is hugely popular in Italy, Germany and other EU countries, and also in Russia. Our Malabar Monsoon coffee is very popular in Scandinavian countries. Indian Arabica is also very popular overseas and is selling at par with its Columbian counterpart. Our Arabica is a little milder than theirs and is well-liked in US and Australia,”
It is notable that the Government of India and the Coffee Board have established the Rainfall Insurance Scheme for Coffee (RISC) to provide a risk management aid to coffee growers. The scheme compensates the insured growers against the likelihood of diminished output resulting from shortfall/excess rainfall for different coverage options such as blossom showers, backing showers and monsoon and post-monsoon rains. However, some growers have raised issues like ‘inadequate subzoning’ that lead to faulty monitoring of rainfall.
Then there is the issue of a shortfall in skilled labour. According to the Karnataka Planters’ Association (KPA), the country’s coffee industry is grappling with severe shortage of skilled labour and must invest heavily in expanding its capabilities. Also, there are many small growers who are yet to be made aware of various government schemes.
Green Coffie Beans are also high in demand in International Market
Even India’s coffee exports are up by almost 20% as against last year (Coffee Board) https://www.indiacoffee.org/ . And it seems Indian exporters will be doing brisk business this season. For those coffee traders who are not yet exporting, we have just one advice – wake up with a mug of coffee export.
India is the world’s only country producing a very high-quality Robusta coffee which is hugely popular in Italy, Germany and other EU countries.
The Coffee Board offers information and training to coffee traders..... so one must get RCMC (Registration cum membership certificate)
http://exportimport.guru/discussionforum/single/what-is-rcmc-do-we-need-to-register-for-rcmc-for-exporting-our-products