Coffee imports value 42pc more than value of exports

January 22, 2019

Rajesh Khanal, The Kathmandu Post, January 21, 2019

The value of Nepal’s coffee imports exceeded the value of its coffee exports by 42 percent in the last fiscal year 2017-18. According to the National Tea and Coffee Development Board, the country earned Rs65.89 million by exporting 163 tonnes of roasted coffee beans while it spent Rs93.72 million on importing 84 tonnes of instant coffee.

Nepali coffee farmers receive only a small fraction of the final price due to the failure to add value and market Himalayan organic coffee in the global market, stakeholders said at an interaction programme on Sunday organised by the board. Nepal produces 513 tonnes of coffee annually.

There are over 100 coffee species. The two main varieties that are widely produced and sold are Arabica and Robusta. Nepal produces and exports Arabica coffee which is typically grown at a height of 1,000 to 2,000 metres.

“As consumers in the world market are switching to Arabica coffee, Nepal has an immense opportunity to tap into the global coffee demand,” said Surendra Kotecha, consulting advisor of coffee quality, blends and price risk management at Selecta and the World Bank.

“Or Nepal can focus on Robusta as it has high productivity. More than the taste and aroma, specialty coffee is free of any side effects,” Kotecha said. According to him, demand for high value Robusta coffee has been growing in the international market and it fetches premium prices.

Brazil, Vietnam, Columbia, Rwanda, Burundi, Indonesia and Ethiopia are the major coffee producers globally. The world market for coffee is growing at the rate of 2.5 percent annually. “Unlike in past when regular Arabica used to hold major market shares, the market demand for specialty Arabica or specialty Robusta has grown manifold,” he added.

In Nepal, according to the development board’s statistics, coffee acreage has been expanding yearly. In fiscal 2017-18, farmers grew coffee on 2,650 hectares, an increase of 300 hectares over the last three years. The growth in acreage has not benefitted coffee growers due to low productivity. Nepal’s per hectare coffee productivity stands at 193 kg. Kotecha said productivity could be improved if farmers switched to Robusta. “This type of coffee can be produced even at an altitude of 800 metres. It grows in a short time and is less exposed to diseases,” said Kotecha. “It can be produced at low cost.”

A report of the Trade and Private Sector Development Project, a European-funded programme, shows that 1.19 million hectares in Nepal are suitable for coffee farming. Of them, 61,228 hectares have the potential to give high yields, but the country is utilising only 4 percent of the acreage potential.

Bhola Kumar Shrestha, coffee and organic agriculture advisor at Helvetas, said poor commercial farming and shortage of labour were affecting the coffee sector. “There is a shortage of workers in the farm sector. Coffee producers are not even able to harvest the ripened cherry in a timely manner,” Shrestha said.

Deepak Khanal, spokesperson for the board, said they lacked adequate funds to carry out research. “As mostly small farmers are engaged in coffee production, the sector is facing insufficient capital investment to boost productivity,” Khanal said. Coffee is grown in 42 districts in Nepal. Gulmi, Arghakhanchi, Pyuthan, Palpa and Syangja are the largest coffee producers.