The coffee production is expected to drop by 12.06% to 5.1 million bags in the ongoing 2016-17 marketing year that runs from October to September as against 5.8 million bags in the previous marketing year, as per USDA. The production of Arabica variety coffee is pegged at 1.4 million bags and Robusta at 3.7 million bags for this year.
According to the US Department of Agriculture (USDA), the drop in output is on account of fall in crop yields because of dry spell in key growing states like Karnataka and Tamil Nadu. Higher global prices for both Arabica and Robusta varieties, coupled with a smaller Indian crop, are pushing domestic prices to their highest levels this year.
The report highlighted that Indian coffee continues to remain competitive in global markets and demand remains strong in the traditional markets of Italy, Germany and Belgium.