Demand for coffee declines due to COVID-19: Union Minister Piyush Goyal

The demand for coffee declined both in domestic and international markets due to Covid-19 pandemic, Union Commerce Minister Piyush Goyal said.

"The demand for coffee in the major coffee markets has shown a downward trend since April 2020 due to the situation arising out of the Covid-19 pandemic," the minister said in his written reply in Lok Sabha.

"India’s coffee exports during 2019-20 have declined by 7.40% in terms of quantity and 10.32% in terms of export value realisation as compared to 2018-19," the minister said while replying to Shobha Karandalje, a BJP MP.

"As per the assessment made by the Coffee Board, while the harvesting of the coffee crop was completed to a large extent by March 2020, some estate operations were delayed, which may have an impact on the coffee crop. However, 95% of coffee roasting units and instant coffee manufacturing units were closed due to the lockdown, the minister said.

Due to restrictions imposed to contain the spread of the pandemic, demand from hotels, restaurants, cafe businesses as well as offices, vending machines, events etc., – which are the major out-of-home customers – was impacted.

Export of coffee (green coffee and value-added coffee, including instant coffee) declined by about 26,400 MT during March 25, 2020, to May 31, 2020, as per the export permits issued by the Coffee Board and inputs received from exporters.

He also said in the past two years, coffee production has been hit due to heavy rain, floods and landslides in major coffee-growing regions of Karnataka, Kerala and parts of Tamil Nadu. 2018-19 had shown an increase of 1.10% over 2017-18. It, however, declined by 6.73% during 2019-20.

The minister also said the government and the Reserve Bank of India, have taken various policy measures to ease the financial stress caused by Covid-19 disruptions. This facility applies to all loans to agriculture and allied activities, including the coffee sector.

However, the minister said no proposal for revision/restoration of export incentive to 5% from the existing 3% given under Merchandise Exports from India Scheme (MEIS) for the coffee sector, is under consideration.