Saturday, November 19, 2011

Foreign demand for Nepalese coffee outstrips supply

The National Tea and Coffee Development Board (NTCDB) argues that foreign demand for Nepalese coffee is far higher than supply. It maintains that the annual demand for Nepali coffee is more than 4,000 tonnes but production is only 400 tonnes. If this is true, then here is an export potential product that won’t require export potential study! And, the contribution of donors working in the promotion of this product is commendable. Nepal is exporting coffee mainly to Japan, the US, and the EU.

With increasing demand, international agencies and local people have been attracted to investing in the sector. “With aid from INGOs, coffee production is projected to reach 8,000 tonnes within a decade,” said Bhandari. INGOs like Helvetas, Winrock and PACT Nepal have been supporting coffee farming.

There are more than 26,000 people engaged in coffee production. Syangja, Palpa, Lalitpur, Ramechhap, Ilam and Gulmi have been identified among 40 coffee growing districts as the main producers of coffee in the country.

Good prospects have led to expansion of coffee farming. According to the NTCDB, the area under coffee cultivation increased to 1,752 hectares in 2010-11 from 1,630 hectares in 2009-10.

Similarly, increasing domestic production has resulted in a decline in imports. Annual coffee imports plunged to Rs 12.51 million from Rs 84.40 million three years ago.

Executive director of the board Raman Prasad Pathak said that demand for Nepali coffee was on the rise due to its better taste and production system which does not use chemicals.

Despite massive demand, the country exported a mere 279.76 tonnes of coffee worth Rs 93.08 million in the last fiscal year. However, the figure is more than double compared to the previous year when exports amounted to 120 tonnes worth Rs 67.5 million.

Coffee Production
Fiscal year Plantation area (Hectares) Production (M.T.)
1994/95 135.7 12.95
1995/56 220.3 29.2
1996/97 259 37.35
1997/98 272.2 55.9
1998/99 277.1 44.5
1999/00 314.3 72.4
2000/01 424 88.7
2001/02 596 139.2
2002/03 764 187.5
2003/04 952 217.5
2004/05 1078 250
2005/06 1285 391
2006/07 1396 460
2007/08 1145 265
2008/09 1531 334