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A PROJECT REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF REQUIREMENTS OF THE TWO YEARS FULL TIME MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY:
Dr. D.M.MAHAPATRA
DECLARATION
I hereby declare that the project report entitled EXPORT POTENTIAL ANALYSIS OF INDIAN COFFEE INDUSTRY has been prepared by me as part of partially fulfillment of my degree.
The project report is my confide report. The results embodied in this project report have not been submitted partially to any other university or college for the award of any diploma degree.
ACKNOWLEDGEMENT
I owe deep sense of gratitude to my beloved institution, greater noida institute of technology. It is with profound sense of gratitude that I wish to reveal my overwhelming thanks to Dr. D.M
MHAPATRA my project guide who has rendered his valuable counsel and guidance in completing
this project. I would also like to thank all my faculty members for their valuable suggestions. Lastly, I put forth my due thanks to my parents, friends and all well wishers for their full fledged and tremendous support in completing this project work successfully and to all the respondents who have cooperated for the collection of data.
Executive Summary
Coffee is the second largest traded commodity in the world & is an extremely important foreign exchange earner as far as the commodities are concerned. Brazil and Columbia are top two coffee producers in the world. They account for more than 40% of the total world produce while Indias contribution is just 4.1%. Indian coffee is rated among the best-quality mild coffees in the international market and is exported to USA, UK Russia, Europe, Sweden, Norway, Yugoslavia, Belgium, Australia, Japan and the Gulf countries.In India coffee cultivation is largely confined to the hilly regions of the southern states of Karnataka, Tamil Nadu and Kerala Karnataka accounts for 53 percent of the planted area (59 percent planted to Arabica, 41 percent to Robusta) while Robusta is dominant in Kerala (which has 28 percent of planted area). In Tamil Nadu however the crop is majorly of Arabica (which has 11 percent of planted area). Some 1, 33,049 small planters and 2,948 large planters cultivated coffee during the year.India produces 260mn Kgs of coffee per year. Indian coffee production has a yield of 800 900 kg. Per hectare, this is low compared to the world average of 1,100 kg per hectare. The area under coffee cultivation is approximately 3.1 lakh hectares.India produces an average of nearly 2 lakh tones of coffee a year, valued at over Rs. 460 crore, mainly grown in south India. Out of the total production only 20% is consumed in the domestics markets rest is exported. Thus India has to depend heavily on foreign markets.Indian coffee is typically mild and not too acidic-and yet it possesses and exotic full-bodied taste and a fine aroma. The flavour is full bodies, slightly acidic and straightforward. The corporate presence in coffee plantations is negligible, although it is high in the end product market. There are only few major integrated coffee players in India. TCL, which is the largest coffee plantation company in India, contributes a mere 2 per cent to the country's total coffee production. This is the result of the significant presence of non-corporate planters. Bulk of the coffee bean production comes from a large number of small farmers. While Nestl India Ltd and HUL are the other major players in the organised coffee industry they do not own plantations. After
being stagnant in the 1990s at 50-55 million kg, coffee consumption in the country started growing in the current decade. CRISIL Research forecasts coffee consumption in India to be 94.8 and 101.0 million kg in crop years 2008-09 and 2009-10, respectively. Coffee consumption is likely to grow at a CAGR of 6.5 per cent over the next 2 years due to spread of the coffee.
Government also made the policy for coffee for the year 2004-09 A new scheme called VisheshKrishiUpajYojana, which has been introduced to boost the exports of fruits, vegetables, flowers, minor forest produce and their value-added products. Duty-free import of capital goods under the Export Promotion Capital Goods (EPCG) scheme. Capital goods imported under EPCG for agriculture permitted to be installed anywhere in the agriexport zones. Assistance to States for Infrastructure Development of Exports (ASIDE) funds to be also utilized for the development of agriexport zones. Import of seeds, bulbs, tubers and planting material has been liberalized. Export of plant portions, derivatives and extracts has been liberalized with a view to promote exports of medicinal plants and herbal products. The Produce CessLaws (Abolition) Act, 2006, was notified in the Gazette of India on 26 September 2006, in order to remove the cesson export of agricultural products and to encourage the export of agricultural products
4.8 Trade policy and regulations.41 4.9 Competitor analysis Brazil.....48 4.10 Future strategy for new market57
INTRODUCTION
The Coffea plant is native to subtropical Africa and southern Asia. It belongs to a genus of ten species of flowering plants of the family Rubiaceae. It is an evergreen shrub or small tree that may grow 5 meters tall when unpruned. The leaves are dark green and glossy, usually 100 150 millimeters long and 60 millimeters wide. It produces clusters of fragrant white flowers that bloom simultaneously. The fruit berry is oval, about 15 millimeters long, and green when immature, but ripens to yellow, then crimson, becoming black on drying. Each berry usually contains two seeds, but 510% of the berries have only one; these are called peaberries. Berries ripen in seven to nine months. According to latest ICO monthly report, world consumption in 2006 is estimated at 117.93 mn bags compared with 116.06 mn bags. While ICO member countries' domestic consumption in 2006 is estimated at little over 31 mn bags, the importing countries consumption is estimated at 86.84 mn bags. European Community's consumption is higher at 85.75mn bags compared with 38.97mn bags in 2005.
India accounts for about 4.5 percent of world coffee production and the industry provides employment to 6 lakh people. Among the coffee growing states, Karnataka accounts for 70 percent of country's total coffee production followed by Kerala (22 percent) and Tamil Nadu (7 percent). Europe accounts for about 70 percent of India's total coffee exports. Of this again, 70 percent is shipped via Suez Canal. Major Indian coffee importing countries include Italy, Germany, Russian federation, Spain, Belgium, Slovenia, US, Japan, Greece, Netherlands and France.
Coffee is the second largest traded commodity in the world & is an extremely important foreign exchange earner as far as the commodities are concerned. Brazil and Columbia are top two coffee producers in the world. They account for more than 40% of the total world produce while Indias contribution is just 4.1%. Indian coffee is rated among the best-quality mild coffees in the international market and is exported to USA, UK Russia, Europe, Sweden, Norway, Yugoslavia, Belgium, Australia, Japan and the Gulf countries.
In India coffee cultivation is largely confined to the hilly regions of the southern states of Karnataka, Tamil Nadu and Kerala Karnataka accounts for 53 percent of the planted area (59 percent planted to Arabica, 41 percent to Robusta) while Robusta is dominant in Kerala (which has 28 percent of planted area). In Tamil Nadu however the crop is majorly of Arabica (which has 11 percent of planted area). Some 1, 33,049 small planters and 2,948 large planters cultivated coffee during the year. India produces 260mn Kgs of coffee per year. Indian coffee production has a yield of 800 900 kg. Per hectare, this is low compared to the world average of 1,100 kg per hectare. The area under coffee cultivation is approximately 3.1 lakh hectares. India produces an average of nearly 2 lakh tones of coffee a year, valued at over Rs. 460 crore, mainly grown in south India. Out of the total production only 20% is consumed in the domestics markets rest is exported. Thus India has to depend heavily on foreign markets. Indian coffee is typically mild and not too acidic-and yet it possesses and exotic full-bodied taste and a fine aroma. The flavour is full bodies, slightly acidic and straightforward. The corporate presence in coffee plantations is negligible, although it is high in the end product market. There are only few major integrated coffee players in India. TCL, which is the largest coffee plantation company in India, contributes a mere 2 per cent to the country's total coffee production. This is the result of the significant presence of non-corporate planters. Bulk of the coffee bean production comes from a large number of small farmers. While Nestl India Ltd and HUL are the other major players in the organised coffee industry they do not own plantations. After being stagnant in the 1990s at 50-55 million kg, coffee consumption in the country started growing in the current decade. CRISIL Research forecasts coffee consumption in India to be 94.8 and 101.0 million kg in crop years 2008-09 and 2009-10, respectively. Coffee consumption is likely to grow at a CAGR of 6.5 per cent over the next 2 years due to spread of the coffee
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drinking habit in non-traditional regions, growing caf culture and increasing share of instant coffee in total coffee consumption (manufacturing 1 kg of instant coffee requires 2.5 kg of coffee beans, while manufacturing 1 kg of filter coffee requires 1.25 kg of coffee beans). The Coffee Board, supported by the International Coffee Organization (IOC), is now placing greater emphasis on boosting domestic coffee consumption through generic promotions, projecting coffee as a healthy drink.
LITERATURE REVIEW
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According the survey conducted by coffee board of India: Indian coffee industrys cup of woes continues to overflow. The country, which exports over 75 per cent of its produce, witnessed a decline in output during the last crop year-ended September 2009. Coupled with this, the sector was hit hard due to economic slowdown. Global demand for coffee is yet to pick up though green shoots are showing up elsewhere in the economy. Indias coffee export earnings have fallen 20 per cent for the first seven months of the financial year 2009-10. Export earnings stood at Rs 1,119 crore during April-October 2009, as against Rs 1,404 crore during the corresponding period of the last year 2008. Output in India was hit due to the heavy crop loss in Karnataka. India produced 262,300 tonnes coffee during crop year 2008-09, which was 10 per cent less than the initial estimates of the Coffee Board. For the present crop year beginning October 2009, India has pegged output at a higher level at 306,300 tonnes arabica 101,525 tonnes and robusta 204,755 tonnes, which will arrive in the market in January 2010. According to president of coffee exporters of India- Mr. Ramesh Raja Higher output this year is expected to boost export volumes. However, exporters say that prices, which are now in a comfort zone, would fall as a result of the increased supply. Indian coffee is fetching around $1.3 per pound, one of the highest in recent months. Bumper crop in major coffeeproducing countries would mean a glut in the market, resulting in a sharp fall in price in the international markets,.
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According to the survey conducted by coffee board of india in different states: In Karnataka compared to the previous post blossom estimate, the increase in production has come from the districts of Chikmagalur and Kodagu with 5.92% (4,250 MT) and 3.15% (3,605 MT) while in Hassan there was a marginal decline of 550 MT (-1.96%). Between arabica and robusta in Karnataka, the increase is from robusta alone (8,855 MT) while arabica has declined by 1550 MT (1.91%). The major zones, which have shown increase are, Giris (14.51%), Balehonnur (13.79%), Chikmagalur (11.63%) and Koppa (10.21%) zones of Chikmagalur district, Napoklu (20.80%), Virajpet (19.14%) and Gonikoppal (11.10%) zones of Kodagu district and Hanbal (18.35%) zone of Hassan district. Good and well distributed rainfall during October to March helped in moisture retention for longer period which in-turn helped in the production of more bearing wood for the crop during the current season. Further the blossom and backing showers were reported to be good and adequate in almost all the coffee growing zones of Karnataka. Generally lower crop in the previous season especially in arabica, coupled with good weather and bush condition and better husbandry practices has helped to regain production in Karnataka Zones. Accounting this, the crop forecast for Karnataka is placed at 79,720 MT of arabica and 141,755 MT of robusta totaling 221,475 MT. Overall, there is 3.41% increase over the previous seasons post blossom production in Karnataka (214,170 MT), which is due to increase in robusta production of 6.66% while that of arabica declined by 1.91%. Kerala coffee zones also have received adequate and timely blossom and backing showers. As no adverse effect on crop was reported especially in coffee growing districts of Wayanad and Nelliampathies though there is a marginal decline in Travancore. Accounting this the post blossom estimates for the 2009-10 is placed at 59,550 MT, which is an increase of 4.11% over the previous 2008-09 post blossom forecast of 57,200 MT. Similarly Tamil Nadu had also shown an increase in crop during the current season mainly because of the biennial bearing nature of arabica as last year was off-year. Further blossom and backing showers were reported to be normal resulting an increase in crop. Accounting this, the Post blossom forecast of Tamil Nadu is placed at 19,550 MT increase by 17.59% over the previous post blossom forecast of 16,255 MT.
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In Non-Traditional areas of Andhra Pradesh and Orissa and North Eastern Region, the postblossom forecast is placed at 5,725 MT against previous post blossom estimate of 5,005 MT. The higher forecast has come mainly from Andhra Pradesh due to increase in bearing area.
EXPORT:
In economics, an export is any good or commodity, transported from one country to another country in a legitimate fashion, typically for use in trade. Export goods or services are provided to foreign consumers by domestic producers. Export is an important part of international trade. Export of commercial quantities of goods normally requires involvement of the customs authorities in both the country of export and the country of import.
The definition of Export is when you trade something out of the country. In economics, an export is any good or commodity, transported from one country to another country in a legitimate fashion, typically for use in trade.
COFFEE INDUSTRY:
2004: Top agri export for 12 countries 2005: 7thlargest agri export (value basis) 2007: Prodn291000MT (Arabica 101 KMT, Robusta 190 KMT) 2008: Targeted domestic consumption 85000 MT Brazil is the largest coffee producer India accounts for 4.5% of global coffee produce
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Coffee industry employs 6 lakh people 70% of Indian Coffee exported to Europe (Italy, Germany)
Problem Definition
The first step in any analysis is to define the problem. In defining the problem, the researcher should take into account the purpose of the study, the relevant background information, what information is needed, and how it will be used in decision making. Problem definition involves discussion with the decision makers, interviews with industry experts, analysis of secondary data, and, perhaps, some qualitative research. Once the problem has been precisely defined, the research can be designed and conducted properly.
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RESEARCH DESIGN
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In this period of globalization, where the whole world has become like a small market, it is essential that countries effort continuously to invest on time, money and skills of their personnel to be able to meet the level of zenith. Coffee is one of the agro product in which India has employed more than six lakhs people and India stood in top ten country, who all are engaged in coffee exporting
To find out the information regarding major exporters and importers in coffee market.
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As the project is prepared for academic purpose it suffers for the limitation of the time and due to which an analytical study into all the potential fields belongs to coffee export of India was not possible
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ANALYSIS
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21
22
60%
II
III
40% 100%
bra z il 35%
v ietna a m 17%
The above pie chart shows the distribution of coffee production in world, according to the above chart it is very clear that Brazil was the highest producer of coffee in the world which produced near
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about 35% of total production of world followed by Vietnam, Indonesia, and Columbia. In the year 2003 India was part of worlds greatest coffee producer with 5% share in total production, India was behind of 5 countries and stood no. 6in worlds top coffee producer.
In the year 2008 the position of nation in contribution in total coffee production remained same though the percentage of contribution changed with great difference, Brazil the main coffee exporter and producer reduced its contribution from 35% to 26% followed by Vietnam, Indonesia and Columbia and these countries also contributed less then 2003. India and Mexico contributed same 8% in the year 2008 which was 3% increase in compare of 2003 in the context of India, which shows the Indias coffee potential in coming year.
4.3 STATE WISE PRODUCTION OF ARABICA AND ROBUSTA IN POST BLOSSOM AND POST MONSOON
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KARNATAKA
District Chikmaglur Kodagn Hassan Sub Total Post blossom 2008-09(mt) Arabica Robusta 33850 32900 24370 90000 18050 10000 81270 132900 Post monsoon 2008-09(mt) Arabica Robusta 36300 27400 24750 83950 12900 6275 73950 117625
The above table is showing Arabica and Robusta production in post blossom and post monsoon in Karnataka state of India. The table shows that in post blossom Chikmanglur district produces maximum Arabica in metric ton where Robusta is produced highest by Kodagan. Where in Post monsoon Arabica is maximum produced in again in Chikmanglur and Robusta in kodgan. The total production of Arabica and Robusta is 81270 and 132900 metric ton respectively and in post monsoon Arabica is produced 73950 metric ton and Robusta 117625 metric ton.
KERALA
District Wayand Travancore Nelliampathie s Sub Total Post blossom 2008-09(mt) Arabica Robusta 10 47500 815 7000 600 1275 1425 55275 Total 47510 7815 1875 57200 Post monsoon 2008-09(mt) Arabica Robusta 25 40300 675 6000 600 1400 1300 47700 Total 40325 6675 2000 49000
In Kerala state Travancore contributes highest in Arabica category both in post monsoon and post blossom. Where in Robusta category Wayand contributes most in post blossom and post monsoon season.
TAMILNADU
District Pulneys Post blossom 2008-09(mt) Arabica Robusta 5500 325 Post monsoon 2008-09(mt) Arabica Robusta 7575 425
Total 5825
Total 8000
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In Tamilnadu the total production of Robusta is 4200 metric ton in post blossom and 4050 metric ton post monsoon season where Total Production of Arabica 12425 metric ton in post blossom and in post monsoon Arabica is produced 14050 metric ton. Where Pulneys district produces most of Arabica in both the season and Nilgiris produces maximum amount of Robusta in both the season.
Total 4880
Total 3175
When we take other states which are producer of coffee but not in the high quantity, in this category Andhra Pradesh and Orissa contributes highest in both the category Arabica and Robusta in Post blossom and Post monsoon season. Whereas north eastern states contributes in very low quantity in both type of Coffee.
INDIA OVERALL
District Karnataka Kerala Tamil nadu Others Total Post blossom 2008-09(mt) Arabica Robusta 81270 132900 1425 55775 12425 4200 4880 125 100000 193000 Post monsoon 2008-09(mt) Arabica Robusta 72950 117625 1300 1300 14050 14050 3200 125 92500 169500
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If we take India overall, Karnataka is the largest producer of coffee which contributes more than 80% overall.
Arabica
Karnataka 81%
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EXPORTS BY EXPORTING COUNTRIES TO ALL DESTINATIONS SEPTEMBER 2009 (60-kilo bags) Oct-08 to Sep-09 Sep-09 TOTAL Colombian Milds Other Milds Brazilian Naturals Robustas Angola Benin Bolivia Brazil Burundi Cameroon Central African Republic Colombia Congo, Dem. Rep. of Congo, Rep. of Costa Rica Cte d'Ivoire Cuba Dominican Republic Ecuador El Salvador Ethiopia Gabon Ghana Guatemala Guinea Haiti Honduras India Indonesia Jamaica Kenya Madagascar Malawi Mexico R R A A/R A R/A R A R/A R A R A A A/R A A R R A R A A A/R R/A A A R A A 6 924 325 1/ 547 736 1 385 151 2 527 285 2 464 153 1 150 0 9 000 2 633 238 25 000 35 000 2 000 501 421 14 000 0 14 942 113 386 0 706 110 000 64 703 161 341 0 1 000 141 430 25 000 2 000 52 788 150 000 700 000 767 40 000 10 000 500 197 489 97 583 820 1/ 10 051 139 20 985 547 30 973 095 35 574 038 5 825 0 74 500 31 552 248 377 517 514 077 25 450 8 716 149 145 638 0 1 177 854 1 571 858 7 462 109 354 1 049 143 1 343 327 1 867 987 0 18 305 3 455 966 284 708 19 266 3 020 880 2 539 021 7 572 872 25 593 571 798 114 178 15 079 2 774 648
Sep-08
Oct-07 to Sep-08
8 088 173 96 077 958 984 678 1 695 795 2 686 828 2 720 871 12 706 274 22 192 754 27 270 644 33 908 286
0 7 275 0 0 10 500 71 184 2 998 799 27 970 183 42 900 184 731 52 019 549 104 2 143 50 899 939 267 11 556 563 15 898 215 929 0 0 43 885 1 402 137 147 647 1 946 550 0 3 850 4 930 74 276 87 639 897 341 52 780 1 430 291 145 597 2 805 680 0 421 5 523 31 515 159 672 3 821 677 14 621 275 689 1 313 18 822 98 966 3 394 793 295 613 3 389 092 766 136 5 510 512 1 550 23 923 40 000 627 105 18 353 216 268 4 050 27 655 184 998 2 555 318
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Nicaragua Nigeria Panama Papua New Guinea Paraguay Peru Philippines Rwanda Tanzania Thailand Togo Uganda Venezuela Vietnam Zambia Zimbabwe Other exporting countries
103 593 0 5 000 100 000 0 467 228 500 12 000 39 157 18 000 7 000 198 988 1 000 940 000 2 000 1 000 22 000
1 432 518 1 768 95 308 931 525 2 805 3 433 063 7 155 289 073 1 200 566 180 800 141 255 3 057 320 35 083 17 408 116 31 434 17 095 368 231
127 472 1 639 964 0 2 156 4 728 117 695 128 084 1 107 633 170 2 666 567 887 3 233 530 6 7 144 44 846 264 801 14 985 747 357 12 900 153 400 4 838 134 131 212 526 3 209 995 1 339 146 996 787 924 15 774 099 3 210 52 973 1 798 22 651 40 661 401 983
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BREAKDOWN OF EXPORTS OF ARABICA AND ROBUSTA FOR COUNTRIES EXPORTING SIGNIFICANT VOLUMES OF BOTH TYPES OF COFFEE SEPTEMBER 2009 (60-kilo bags) Oct-08 To Sep-09 Oct-07 To Sep-08
Sep-08
056 Other Milds (W) 63 223 486 201 46 385 473 879 Brazilian Naturals (D) 2 184 164 26 786 714 2 340 487 21 829 Robutas (D/W) 046 131 291 1 370 637 314 923 2 025 131 Cameroon Total Other Milds (W) Robutas (D/W) Total Other Milds (W) Robutas (D/W) 35 000 514 077 52 019 0 52 019 15 898 8 170 7 728 29 832 9 876 3 795 16 161 549 104 55 361 493 743 215 929 72 105 143 824 129 797 36 240 42 981 50 576
14 000
145 638
Ecuador
Total 50 000 Other Milds (W) Brazilian Naturals (D) Robutas (D/W) Total Other Milds (W) Robutas (D/W)
360 286
India
150 000 1 991 596 215 938 2 618 292 49 408 793 878 166 530 1 824 415
Indonesia
675 000 7 105 215 702 511 5 131 414 1 136 3 736 3 170 431 836 698 205 4 695 841
127 968 1 106 678 125 248 1 096 2 720 363 10 315 746 364 33 522 110 224 255
Tanzania
The above chart shows percentage contribution of India in world export, which was in increasing mode in 90s. but from the 2000-01 it started decreasing and reached to 3.4% .
25.25
1.87
1.73
1.7
1.45 1.43
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Ita ly 33%
S pa in 6% Belg ium 7%
G erm a ny 12%
R ussia 14%
Ind ia is one of the major producers of coffee but its export got decreased in last 10 years due to heavy and increased consumption of coffee within the country. The consumption of Coffee in India has increased from 55000 metric ton to 85000 metric ton, which has decreased the Indian export of coffee.
4.6 - COFFEE CONSUMPTION BY WORLD Country EU 200001 380.3 200102 382.0 9 69.36 7.10 8.16 195.5 200203 386.3 7 68.75 6.92 8.21 191.2 200304 397.3 2 67.70 6.83 8.52 201.9 200405 410.7 3 71.17 7.09 7.22 209.7 200506 392.7 6 71.28 7.43 10.99 209.9 200607 409.4 1 72.68 7.21 9.32 206.6 2007-08 406.88 72.82 7.71 9.89 210.46
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Total
6 648.8 6
4 662.2 5
5 661.4 9
3 682.3 0
3 705.9 4
8 692.4 5
7 705.3 0
707.77
The coffee consumption trend is very much high in European union which is increasing from last 10 years. After EU, USA is the largest consumer in the world and one of the potential future market of India. Japan is also a good consumer of coffee with third highest consumption in world with 72.82 mt in year 2007-08.
The following graph shows the importance of European union for the all coffee exporter countries. The EU alone consume more than 50% of worlds total coffee production. In the year 2007-08 EU consumed 58% of total which was less in compare of year 2000-01.
ECONOMIES OF COFFEE
DOMESTIC COST OF PRODUCTION Cost of production for 1 acre land area P2P spacing 8 feet x 8 feet Trees per acre (avg.) = 647
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Avg. yield of cherries = 4.5-5 Tonnes/ acre Avg. bean obtained per acre = 2.5 Tonnes
Operating costs are as follows: Production cost Harvesting & PHT cost Processing & Packaging cost Marketing & Exporting cost
OperatingCost per acre (A) ProductionCost (Rs.) 1.Landpreparation a) Labourcost@ Rs.100/ mandays b) Equipmentcost @ Rs. 200/ hr. 2. Propagatingmaterial cost 3. Fertilizer cost 4. Herbicide/ Chemicalcost 5. Irrigation cost @ Rs.250/ hr. for 10 hrs. 6. Pruning cost @ Rs. 150/mandayfor 4 days 7. Picking cost@ Rs. 200/ mandayfor 4 days 8. Miscellaneouscost 9. TOTAL COST OF PRODUCTION Per unit Production Cost (Coffee Beans) Avg. Production per acre Avg. Productioncost per acre Unit Cost ofproduction (Rs./kg) 400 1,600 500 800 500 2,500 1,200 1,600 1,500 10,600
Avg. OperatingCost per unit production (Rs./kg) A. ProductionCost 4.07 B. Harvesting+ Post Harvesting Cost 15.00 C. Processing + Packaging Cost 25.00 D. Marketing + Exporting Cost 30.00 TOTAL COST INCURRED (per kg) 74.00*
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Avg. PRICE IN AUGUST 2008 (per kg) Profit % Profit overCost Incurred 4.7- FREIGHT CHARGES
The freight charges are dependent upon the destination Different Service providers charges different rates depending upon the size and frequency of the consignment According to UPS Service guide : EU comes under Zone 4 of Exporting destinations United States comes under Zone 5 Australia comes in Zone 3 African Nations comes under Zone 7
INTERNATIONAL PRICING Governed by ICO indicator Futures price at NewYork Commodity Exchange Prices expressed in US cents per lb
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Top Exporting Countries BASIS OF SHORT LISTING Total Production for year 2007-08 Total Export for year 2007 % of total quantity exported worldwide (000 bags of 60 kg each)
NAME AND ADDRESS Nestle India Ltd., No.60/62, New Timber Yard Layout,
TELEPHONE 080-30610575
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Stage1, Mysore Road, 2 Bangalore. AllanasonsLtd., 4, J.A. AllanaRoad, G.P.O. Box No.997, Colaba, Mumbai 3 -400 001 Hindustan Lever Ltd., Brook Fields, P.B.3777, MarathahalliPost,Bangalore4 37 Amalgamated Bean Coffee Trading Ltd., 1, RahejaChambers, 12, 5 Museum Road, Bangalore Tata Coffee Ltd., " Brigade Point", No. 57, Railway Parallel Road, Kumara Park West, Bglre 6 RameshExports Ltd., 4405/5, High Point IV Palace Road,Bangalore-560 7 001.email ITC Ltd., 31, SarojiniDevi Road, Secunderabad-500 003, Andhra Pradesh 040-27801914 080 -22253520080 -22251427 080-23560695 080-25589581080-25580394 080-28475021 022-2874455
422-2647881
12/2,Periyathotam,. MadhuJayantiInternational 080-51235801 Ltd., P.B.No.511, 39, Cunningham Road Cross, Bangalore-52
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OlamExports (India)) Ltd., # 080-51153325080-51153326 1103, "Ashwini" ,13th Cross, Indiranagar2nd Stage, Bangalore
HS Code
Description
Unit of Qty
090111
09011121
Kg.
Assistance to States for Infrastructure Development of Exports (ASIDE) funds to be also utilized for the development of agriexport zones.
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Import of seeds, bulbs, tubers and planting material has been liberalized. Export of plant portions, derivatives and extracts has been liberalized with a view to promote exports of medicinal plants and herbal products. The Produce CessLaws (Abolition) Act, 2006, was notified in the Gazette of India on 26 September 2006, in order to remove the cesson export of agricultural products and to encourage the export of agricultural products
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Codex standards are established establishing Maximum Residue Limits (MRL) for 17 agrochemicals in coffee beans. Tolerance limits are prescribed by CODEX for various agro-chemical residues in coffee. Codex agrochemical MRL (ppm) Codex Alimentarius Pesticides
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MPL(ppm) 0.1 ppm 0.1 ppm 1.0 ppm 0.05 ppm 2.0 ppm 0.2 ppm 0.1 ppm 0.05 ppm
MPL(ppm) 0.05 ppm 0.1 ppm 0.05 ppm 0.2 ppm 0.1 ppm 0.05 ppm 0.1 ppm 0.05 ppm
ISSUE OF EXPORT PERMITS & CERTIFICATE OF ORIGIN Coffee Board issues Export permits under Rule 44(2) Coffee Act 1942 amended from time to time along with Certificate of Origins to the registered exporter of coffee against application, for coffee export
FURNISHING POST-SHIPMENT DOCUMENTS The registered exporter shall submit the post-shipment documents on export of coffee against each export permits obtained by them. The post-shipment documents viz., copies of export permits, bill of lading with on Board Date Seal and certificate of origin duly endorsed by the concerned Customs Authorities, along with other details viz FOB value etc, shall be submitted to the Coffee Board within 45 days from the date of issue of export permits.
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INTIMATION REGARDING CHANGE IN CONSTITUTION In case of change in ownership, constitution, name or address of an exporter shall be intimated voluntarily within one month from the date of such change.
IMPORTANT CIRCULARS QMS :The QMS or Logo scheme has been framed in order to protect the Image and Quality of Indian Coffee in the International Market and to gain the confidence of the overseas buyers. The Board has framed the Quality Marking Scheme w.e.f. 24/11/2000 for issue of Logo Certificate for export of coffee to those who voluntarily opt for the Scheme, for the Coffee cured by the Certified Coffee Curing Works. ICB GRADING STANDARDS Coffee Board issues Export Permits for export of coffee only to the Specified Types and Grades of coffee.
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PACKING LIST
The packing list (P/L) is a commercial document accompanying the commercial invoice and the transport documents, and providing information on the imported items and the packaging details of each shipment (weight, dimensions, handling issues, etc.) The data generally included are:
Information on the exporter, the importer and the transport company Date of issue Number of the freight invoice Type of packaging (drum, crate, carton, box, barrel, bag, etc.) Number of packages Content of each package (description of the goods and number of items per package) Marks and numbers Net weight, gross weight and measurement of the packages
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2) List of Ingredients
3) Net Quantity
4) Date of Expiry
6) Place of origin
8) Lot marking
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Maximum employment- Coffee production is the major activity of Brazilian economy, which also contributes in GDP in good proportion, which shows its a very vast field in Brazil and because of its large size it provides large employement.
Brazil is the giant in this field of coffee production and export but still there are various other hurdles like Vietnam , Columbia etc and various other emerging agri depended economy. Though brazil is having high consumption of coffee it has focused itself as a argest exporter with the help of various means.
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Suitable soil condition- One of the greatest strength of Brazil coffee industry is the suitable soil and environmental condition of Brazil, The whole Brazilian condition is very well for coffee cultivation where the other producer of coffee like India does not have such type of condition where the whole countrys condition is useful for coffee cultivation.
in agriculture
(cultivation of coffee) so the Brazilian coffee industry has got large man power to work for.
Industry support/ Technology- Since Coffee cultivation is one of the major factor which contributes in Brazilian economy, the whole coffee industry has a great industrial support and technology support from the government and the coffee market itself. Innovative and latest technologies gets used by the farmers to improve the production of coffee.
Vast area of crop/ Mechanization- Brazil has vast area present for cultivation of coffee and well machinery is used well planned way.
No alternative- Brazil has big area present for cultivation and there is very less option present to contribute in GDP, so by understanding the Less resources government and other factors very well uses the Coffee cultivation to improve the Economy.
Regulated market- Brazil has well regulated market for coffee, other than India and other countries.
WEAKNESS
Lack of other skills- As it is very clear that coffee cultivation is only major source of employment but in many areas people has very less skills regarding coffee cultivation and other industries as well.
Non adaptability- The environment of Brazil creates very difficult for the population to adopt other source of business .
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OPPORTUNITY
Friendly Policies- The government of Brazil understands the opportunity involved in coffee cultivation, and due to lack of other resources government knows the importance of coffee cultivation so, the policy framed by government regarding coffee cultivation is very friendly in nature. Which does not only encourages the coffee cultivation in country but it also helps the other nation to transect with Brazil.
Increasing awareness- To promote the coffee industry various steps has been taken, which will certainly improve the awareness of people regarding the coffee cultivation which will be helpful to grow the industry more in near future. Expanding market- The increase in consumption of coffee worldwide provides a huge market to brazil to expand.
Shift in Agriculture- Due to high chances of growth and wealth maximization most of the people are shifting to agriculture, which is a good indicator of future growth of coffee cultivation on Brazil
THREAT
Political Disturbances- The political disturbance and the political instability is one of the biggest threat in the field of coffee industry, it does not only discourage the internal factors but also the customers who transect with the Brazil regarding coffee.
Natural Calamity- Natural calamities some time badly spoils the coffee cultivation, since Brazil is near to ocean the chances of tsunami and other cyclones are very high
Insect infestation- Insect infestation spoils the total production of the country
War/ Emergency situation- The other factors like war and emergency spoils the image of country in the world and it ruins the trade of country with another country
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Favourable soil- The various part of India is very much enriched with favourable soil of coffee. Some part of India like Karnataka, Kerala, Andhrapradesh , Assam etc
WEAKNESS
Unregulated- The Unregulated market of Indian coffee industry is one of the weakness which explains why the Indian coffee industry is not growing at its fullest.
Lack of skill- There is lack of skills in India which is working as a barrier, Indian coffee industry can improved and grows to its fullest if well and skilled labour are employed to it.
Less risk takers- Since Coffee is still emerging sector in India there are vary less entrepreneurs who wants to take risk.
Orthodox techniques- The lack of technology and non supportive techniques does not help in coffee cultivation promotion
OPPORTUNITY
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Expanding Market- The Highly increased coffee consumption provides high expended market for Indian coffee industry.
CSR- Various other large business firms are encouraging Agriculture as a part of their social corporate responsibility.
Advent of Technology- Introduction of new technology in coffee industry is helping the high cultivation of coffee.
Increasing awareness- Now a days government and various other organization are increasing awareness in the field of agriculture, which certainly goi ng to improve the future production of coffee.
Better profit ratio- coffee industry is providing high profit ratio, which is attracting various investors in the field of coffee cultivation.
THREAT
Poor policies- The poor policies run by government does not attract investors and others to trade with Indian coffee industry. Political Disturbances- The political disturbance and the political instability is one of the biggest threat in the field of coffee industry, it does not only discourage the internal factors but also the customers who transect with the country regarding coffee.
Natural Calamity- Natural calamities some time badly spoils the coffee cultivation, since the Indian borders are close to ocean, the chances of tsunami and other cyclones are very high
Insect infestation- Insect infestation spoils the total production of the country
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War/ Emergency situation- The other factors like war and emergency spoils the image of country in the world and it ruins the trade of country with another country
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SWEDAN
ENGLAND
ITALY
USA
JAPAN
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Country
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UNREGULATED MARKET
POSITIVES
ADOPTION OF TECHNOLOGY
POSITIVE GROWTH
GOVERENMENT SUPPORT
HIGH PRODUCTION
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The worlds and Indian increased coffee consumption provides huge local and global market.
The new technologies and policies are introduced to the Indian coffee industry to promote the cultivation of coffee.
Various initiatives have been taken by various corporate houses as their corporate social responsibilities.
Indian soil and climate are well supportive for the coffee industry and India has a large amount of population to employ in this industry.
The Indian coffee industry is going to help the Indian economy by providing employment opportunities and it is also going to play a major role in Indian GDP.
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BIBLIOGRAPHY
www.ncausa.org www.indiastat.com www.google.com www.commerce.nic.in Transport Information Services, Germany Coffee Board of India, Annual Report UPS Rate and Service Guide European Taric Code International Coffee Organisation, Annual Report CMIE Magazine Marketing Research Naresh K. Malhotras
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