BENGALURU (Commodity Online ) : Increased domestic coffee consumption might force India to import coffee beans from Latin and Central America if local output and productivity don't increase significantly, industry representatives said.

The country's consumption is growing at 6% annually, industry experts said at Third India International Coffee Festival Wednesday.

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India's coffee crop of 2009-10 (Oct-Sep) is projected at 300,000 tonne, of which 32% is for domestic consumption and the rest for exports.

Within a decade, India's domestic consumption could double from 100,000 tonne currently, Cafe Coffee Day Chairman V.G. Siddhartha said.

He expects the number of fine coffee cafes in India to increase to 3,000 from 1,200 within five years and the number of vending machines to increase to 50,000-60,000 from 20,000-25,000 now.

The country's coffee output growth is not keeping pace with rise in consumption, industry officials said.

India's average productivity for Arabica variety was around 300-400 kilogram an acre, compared with 2 tonne in Latin and Central America.

Cultivation of Indian Arabica, which is often ravaged by white stem-borer disease, will not be viable at such low productivity, said Tata Coffee Managing Director M.H. Ashraff.

Cost of production has been rising and productivity falling, Coffee Board Chairman G.V. Krishna Rau said. He said sustainability of coffee farms was in question.

Labour costs and manpower shortage have emerged most important concerns, he said. Poor Arabica coffee productivity could be improved through new planting material developed through tissue culture.

Arabica's share in India's coffee crop has been falling and is now at 32% from 57% in 2000, S.V. Ranganath, chief secretary in Karnataka government said. He said the challenge before Indian coffee industry was to improve productivity of Arabica.

World coffee consumption growth was satisfactory in the backdrop of meltdown in global markets, credit crunch and initial depreciation of dollar, International Coffee Organisation Executive Director Nestor Osorio said.

Currently, world coffee consumption stands at 130 million bags of 60 kg each, compared with 102-104 million in 2000.

While there was equilibrium between world supply and consumption, there are no stocks in producing countries.

Importers had stocks of around 25 million kg. Any disruption in production could be problematic, Osario said.

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