A COMPARATIVE STUDY ON EXPORT PERFORMANCE OF TEA AND COFFEE IN INDIA

PROJECT REPORT

SUBMITTED TO KOVAI KALAIMAGAL COLLEGE OF ARTS AND SCIENCE IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF

MASTER OF INTERNATIONAL BUSINESS SUBMITTED BY P.TAMILSELVI (Reg.No: 1131S0164)

UNDER THE SUPERVISION OF

Ms.T.Kiruthika, MIB., MBA., M.Phil., PGDCA.,

Assistance Professor Department of International Business

2011

2013

DEPARTMENT OF INTERNATIONAL BUSINESS

KOVAI KALAIMAGAL COLLEGE OF ARTS AND SCIENCE

[Affiliated to Bharathiar University ]Narasipuram, Coimbatore-641109

Certificate
Kovai Kalaimagal College of Arts and Science
(An ISO 9001:2000 Certified Institution- Affiliated to Bharathiar University) Narasipuram post, Coimbatore-641109.

Department of International Business (PG)

Certificate
This is to certify that is the bonafide record of the work done by P.TAMILSELVI (Reg.No: 1131s0164) during the period ( 2012-2013) of her study under the guidance of Ms.T.Kiruthika, MIB., MBA., M.Phil., PGDCA., Assistant Professor, Department of International Business, in the partial fulfilment of the requirement for the award of Master of International Business degree of Bharathiar University, Coimbatore .

_______________________
Signature of the Guide,

Ms.T.Kiruthika, MIB, MBA, M.Phil, PGDCA., Department of International Business. ____________________________ Signature of H.O.D, Mr.N.Dinesh, M.com (IB), M.Phil. Department of International Business. _____________________________ Signature of Principal, Dr. S.Natarajan, M.A, M.Phil, Ph.D., Kovai Kalaimagal College of Arts and Science

Submitted for the Bharathiar University Project viva examination held on _____________ at Kovai Kalaimagal College of Arts and Science, Coimbatore.

Internal Examiner

External Examiner

Declaration

DECLARATION
I hereby declare that the project entitled A comparative study on export performance of tea and coffee in india submitted to the Bharathiar University in partial fulfilment of the requirement for the award of the degree of Master of International Business is a record of original work done by me under the supervision and guidance of Ms.T.Kiruthika, MIB., MBA., M.Phil., PGDCA., Assistant Professor, Department of International Business, Kovai Kalaimagal College of Arts and Science, Coimbatore and it has not formed the basis for the award of any degree or diploma or associateship or fellowship University. or other similar title to any candidate of this or any other

____________________ Signature of the Candidate, P.TAMILSELVI, (Reg.no:1131s0164)

Counter sign, ____________________ Signature of the Guide,

Ms.T.Kiruthika, MIB., MBA., M.Phil., PGDCA.,

Assistant Professor, Department of International Business.

Acknowledgement
ACKNOWLEDGEMENT

I would like to take this opportunity to express my sincere thanks to Dr.K.A.Chinnaraju M.sc., MBA., Ph.D., Secretary, Kovai Kalaimagal College of Arts and Science, Coimbatore for giving this opportunity and encouragement during my course of study.

I would like to express my sincere and heartfelt thanks to Dr.D.Muthuraj M.sc., M.Phil., Ph.D., PGDBA, Advisor, Kovai Kalaimagal College of Arts and Science, Coimbatore for his kind support during my course of study.

I express my sincere gratitude to Dr.S.Natarajan M.A, M.Phil, Ph.D., Principal, Kovai Kalaimagal College of Arts and Science, Coimbatore for his kind support during my course of study.

I also express my sincere thanks to Dr.V.Vijayalakshmi M.com, M.Phil., Ph.D., PGDCA., Dean, Department of Commerce, Kovai Kalaimagal College of Arts and Science, Coimbatore for her encouragement and support successfully. to complete the course

I thank Mr.N.Dinesh M.com(IB), M.Phil.,

Head of the Department, Department of

International Business, Kovai Kalaimagal College of Arts and Science, Coimbatore for his encouragement and advice during my course of study. My deep sense of gratitude to my Guide and Supervisor Ms.T.Kiruthika, MIB., MBA., M.Phil., PGDCA., Assistant professor, Department of International Business, Kovai Kalaimagal College of Arts and Science, Coimbatore for all his suggestions and valuable guidance, encouragement and advice throughout this Project.

Table of Contents

CONTENTS

Chapter No

Particulars

Pg. No

List Of Tables List Of Charts 1. Introduction: 1.2 Objectives 1.3 Scope Of The Study 1.4 Limitations Of The Study 1.5 Research Design 1.6 Statistical Tools 2. 3. Review Of Literature Tea And Coffee 3.History Of Tea 3.2 Modern Tea Production Method 3.3 Tea Exports From India 3.4 Characteristics Of Tea 3.5 Types Of Tea

1 2 3 9 10 11 12 13 14

29 30 31 33 35

3.6 Production Of Tea 3.7 Tea Board Of India

37 42

3.8 History Of Coffee 3.9 Types Of Coffee Beans 3.10 Coffee Board Of India 3.11 Coffee Growing Regions 3.12 Export Of Coffee From India 3.13 Process Of Monsooning 4. 5. Data Analysis And Interpretation Findings And Suggestions 5.1 Findings 5.2 Suggestions 5.3 Conclusion Bibliography 76 77 78 79 43 46 48 49 50 53 55

List of Tables

List of Tables

S.No
4.1 4.2 4.2 4.4 4.5 4.6 4.7 4.8 4.9 4.10

PARTICULARS Countrywise Production Of Tea In World Production Of Tea In India Production Of Tea In India-Trend Analysis Export Of Tea In India Export Of Tea In India-Trend Analysis Countrywise Production Of Coffee In World Production Of Coffee In India Production Of Coffee In India-Trend Analysis Export Of Coffee In India Export Of Coffee In India-Trend Analysis

Pg .NO 56 58 60 62 64 66 68 70 72 74

List of Charts

List of Charts
S.No
4.1 4.2 4.2 4.4 4.5 4.6 4.7 4.8 4.9 4.10
PARTICULARS Countrywise Production Of Tea In World Production Of Tea In India Production Of Tea In India-Trend Analysis Export Of Tea In India Export Of Tea In India-Trend Analysis Countrywise Production Of Coffee In World Production Of Coffee In India Production Of Coffee In India-Trend Analysis Export Of Coffee In India Export Of Coffee In India-Trend Analysis

Pg .No
57 59 61 63 65 67 69 71 73 75

Chapter I

Introduction

CHAPTER I

1.1.

Introduction
Every economy, whether it is developed or under developed, having realized the

importance of foreign trade tries to increase its exports of commodities. However, the nature of the commodities exported difference from country to country. The developed countries, since they have strong industrial base exports industrial goods, while the developed countries are lacking in capital formation. They happen to be industrially weak and export traditional commodities. At the Indian context two agricultural commodities that are worth mentioning are Tea and Coffee. In this project it is attempted to analyze the export growth of tea and coffee and make a comparative export performance analysis.

Thus from the fore gone empirical analysis it can be under stood that export of tea has already a place of the pride in the history of exports of India though it fluctuated in the middle. In the case of coffee though export share is at its minimum, it is increasing continuously indicating an increasing scope for further exports. However, it is to be noted that the export growth depends on two major factor. The one is the local or the domestic output and the other one is the international price for the production. Thus, it become pertinent to analyse the output performance of tea and coffee on the one hand and the responsiveness of the tea and coffee to changes in the international prices for these products.

3
Indian agriculture has greatly contributed to foreign trade even in its traditional form. Indian Agricultural products have been facing stiff competition from Asian countries for quite some times.

Due to globalization and liberalised regime, this competition is likely to increase further and new initiatives in agriculture development shall have to meet the emerging challenges. The performance of agriculture after integration with the world markets is linked to the success of exports. In its bid to increase overall exports, the government of India has decided to achieve this objective by giving a push to production and export of agricultural commodities. Agriculture has been a source of foreign exchange for India in the past. Most of the

export earnings of agriculture came from the conventional items such as tea, cashew and spices. India's share in the world agricultural exports is very low in many items. Until the beginning of the early seventies India has been an importer of a number of agricultural commodities. With the exception of a few commodities like rice, cotton, tea, coffee, oilseeds, oil cakes, tobacco and spices, the share of agricultural export of India in total world trade was very insignificant. The share is particularly low in the world trade of fish, meat, chicken, vegetables and fruits. India has made substantial strides in the total world production of many commodities. However, its share in the export market is relatively very small. The pertinent questions of marketable surplus and export surplus are ailing the export potentials of Indian agricultural products. Nevertheless, the country has made phenomenal efforts in enhancing the agricultural exports.

4
Indian agricultural commodities have come to occupy a supreme position in the global market over the years. Today, India is a major supplier of several agricultural commodities like tea, coffee, rice, spices, cashew, oil meals, fresh fruits, fresh vegetables, meat and its preparations and marine products to the international market. However, the country faces fierce competition from other major players in the field, both the existing and new entrants in the fray. Ironically, the major challenge is from within Asia itself where countries like China, Malaysia, Philippines, Thailand, Singapore and Indonesia among others pose a big threat to Indian agricultural products.

Agriculture trade contributes 15% of total foreign exchange earnings. Broadly, agricultural and agri-based products can be divided into three categories, they are raw products, semi-raw products and processed and ready to yield products. The major agri-exports of India are cereals, rice, basmati rice and non-basmati rice, spices, oilcake, tobacco un-manufactured, tea, coffee and marine products. Lack of market access in the developed market economy countries due to high tariffs and pronounced Non-tariff barriers has bees acting as a deterrent for the exports. As against agricultural exports, agri-imports constitute only a small proportion of the countries total imports 5%. Coffee is one of the most widely traded agricultural commodities in the world. It is farmed in 80 countries and exported by over 50 in Central and South America, Africa and Asia. The 25 million coffee farmers in the developing countries are mostly smallscale producers.

5
More than a 100 million people are engaged in producing and processing coffee.Clearly, the production of coffee has a significant impact on the economic development of the producing areas and their environment. Coffee bean prices often below low cost of production unleaded a series of adverse consequences among rural workers and small scale farmers. As handful of transnational corporations control the market. Indian exports of coffee in the world as India accounts for about 4.5 percent of world coffee production and the industry provides employment to 6 lakh workforce. It was seen from the exports figures that India exports major portion of green coffee instead

of processed coffee. Due to that the growers of India as well as exports are not getting the maximum profit being one of the largest producers of coffee beans. Indian Coffee has created a niche for itself in the international market, particularly Indian Robusta which is highly preferred for its good blending quality. Arabica coffee from India is also well received in the international market. India is perhaps the only coffee producing origin whose coffees are fully shade grown, entirely hand picked and completely sun dried. Although coffee is considered as an export market crop, its performance has not been encouraging in the post 1991 economic liberalization period. Coffee, although an important commodity in Indias agricultural exports have faced fluctuating international prices and decreasing unit value realization, especially in the post reform period. As we know that the Coffee Industry of India is the 6th largest producer of the coffee in the world. It produces both variety of coffee i.e. Arabica & Robusta.

6
The bulk production taking place in the southern states and most noted is its Monsooned Malabar variety. And it is believed that coffee varity has been cultivated in India longer than anywhere outside of the Arabian peninsula. About 75 per cent of the total coffee produced in the country is exported to over 88 countries of the world. As such, the import of coffee has been insignificant. In order to discourage import of coffee of other origin, the import duty @100 per cent is payable. The top five export markets for Indian Coffee are the Russian Federation, Italy, Germany, Belgium, and Spain. The Coffee Board has stepped up its efforts to keep the

Indian brand afloat by holding Fine Cup Awards Flavour of India in different global coffee markets commencing 2003 as an annual event. India is the largest tea exporter in the world. This gives us an idea of the magnitude of production, and of its economic impact on the country. Many varieties of tea are produced in India. Since the country is large, the producing regions are subject to widely varying climatic conditions. Some plantations are situated very high, others in the plains; some of the plants are from original Chinese stock, others are indigenous, and still others are hybrids. As a result, the quality of Indian tea varies considerably, and it is important to know an Indian tea's region of origin. Teas from South India come from Travancore and Nilgri, regions of plateaus similar to those in Sri Lanka. These teas give a pleasant, gentle beverage with a good color but little character; they are most often combined with more robust teas.The tea industry occupies a place of considerable importance in the Indian economy, producing a fourth of the worlds annual tea output among them some gardens producing high quality teas and employing around 1.26 million people at tea plantations and 10 million persons derive their livelihood from tea.

7
In Northeast India alone, the tea industry employs around 900,000 persons on permanent rolls. India is one of the largest consumers of tea globally. However, as domestic demand accounts for over 86% of the countrys tea output and since tea imports are permitted only for re-export, Indias share of the global tea trade is on the lower side. Nevertheless, exports have a critical role to play in maintaining the demand-supply balance in the domestic market. Although tea is produced in 14 States in India, five of them Assam and West Bengal in North India, and Tamil Nadu, Keralaand Karnataka in South India account for

over 98% of Indias tea production. Within that, NorthIndia alone accounts for around 75% of Indias total tea production, of which 85-90% is consumed in the domestic market. The balance, much of it of high quality, is exported. Tea is among the most labour-intensive of all plantation crops. On an average, around 65% of the cost of production is incurred on labour.

8
1.2.Objectives Of The Study

To analyse the overall export performance of tea and coffee from India. To estimate and compare the export growth of tea and coffee. To predict the future export for tea and coffee. To estimate the production rate of tea and coffee in India.

 To trace out the trends in the growth of tea and coffee export.

9
1.3.Scope Of The Study

The study would help to the tea and coffee exporters to find out the export trend, and it helps them to increase their performance.

The study would helps to the tea and coffee producers to increase their production at correct time.

 The study also helps to find profitable market to tea and coffee.

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1.4.Limitations Of The Study

The study conducted may not be enough to generalize the scenario of the Tea and Coffee.

Since the data collection is of secondary in nature, there is chances for bias of information.

 Due to lack of time in-depth study was not possible.

Accuracy of secondary data is not known.

11 1.5.Research Design

1.5.1.Data Collection:
Data collection is any process of preparing and collecting data. In this study the secondary data were collected.

Secondary Data:
Secondary data, is data collected by someone other than the user. Secondary data analysis saves time that would otherwise be spent collecting data and, particularly in the case of quantitative data. Data collected from a source that has already been published in any form is called as secondary data.

Secondary Data Source:

This study, for the purpose of analysis relied exclusively on the data collected from secondary source.Secondary data is that have been already collected by and readily available from other sources. The data collected was through the use of magazines, journals, newspaper and websites. The data were collected from the agricultural statistics Republished by Ministry of Agriculture.

12 1.6.STATISTICAL TOOLS

Trend Projection Method:

Trend Projection Method is essentially concerned with the study of movement of variable through time. The use of this method requires a long and reliable time series data. The trend projection that the factors responsible for the past trends in variables to be

projected will continue to play their part in future in the same manner and to the same extend as they did in the past in determining the magnitude and direction of the variable .

Formula: y = a+ bx Where, y x = the variable considered for analysis. = the period ranging from 1 to n.

a & b = parameters to be estimated.

13

CHAPTER SCHEME
Chapter I
Introduction-objectives of the study-scope of the study-limitations of the studyresearch design-statistical tools.

Chapter II
Review of literature

Chapter III
History of tea-modern tea production method-tea export from india-characteristics of tea-types of tea-prodution of tea-tea board of india. history of coffee-types of coffee beans-coffee board of india-coffee growing regions in india-export of coffee from indiaprocess of monsooning.

Chapter IV
Data analysis and interpretation.

Chapter V
Fidings-suggestions-conclusion-bibliography-annexure

14

Chapter II

Review Of Literature

CHAPTER II

2. Literature Review

1.Chand and Tiwari,(1991),analyzead growth and instability of Indias export and import of agricultural commodities. Jaganathan , (1992) , in his paper examined the instabilities of export earnings of selected groups and selected commodities and all the commodities from the period 1974-75 to 1989-1990. Pal , (1992) , analyzed them agnitude , causes and effects of instability of agricultural export earnings of India for the period 1979 to1989.Subramaniam , (1995) , analyzed the impact of fluctuations in tea production and exports on international teatrade .He articulated that India plays a significant role in world tea trade , being the worlds largest producer ,consumer , and exporter . Therefore , fluctuations in Indias tea production , consumption and exports are enough to disturb international tea trade . Aiello , (1999) , analyzed that the effects of export earnings instability on economic growth of developing countries has long interested economists for several reasons . Reddy , (2001) , examined global demand for and supply of tea by estimating semi log trends separately using data of the recent past , 1974to 1988 , on the area under cultivation of tea , production , export and retention of tea for domestic consumption .Debraj , (2003) , in a column in India together news letter said that globalization has hit the Indian tea industry . Headded that its traditional market in the countries that made up the former Soviet Union have been steadily drained upand hence results in falling demand for tea in abroad .Sathe and Deshpande , (2006) , in their paper made an attempt to review the changes in their trends and composition of agri-trade from 1990 till 2004 .

15

South Asian watch onTrade (2006) analyzed that in Nepal, tea had potential to benefit large segments of rural population and lift them out of poverty and stagnation. Shinoj and Mathur , (2008) , in their paper identified that the recent developments in the international trade scenario and corresponding alterations in Indias foreign trade policies has depicted for reaching implications for Indias agricultural sector and agricultural exports in particular . The study also revealed that India had been able to maintain its comparative advantage , but several others such as tea , coffee , spices , etc., had been negatively affected by trade openness policy . Wong ,(2006) ,proclaimed that the existence of a positive and significant effect of trade openness on the productivity of manufacturing industries in export - oriented industries in the years after trade reforms curve implemented, but decreasing productivity after 2000 .Yucel, (2009),examined the causal relationship between trade openness and economic growth (GDP) for the Turkish economy .The findings of his study showed that while trade openness has a positive effect , financial development has a negative effect on growth. Vander and Wall (2008) examined the sustainability issue in the tea sector for six leading tea producing countries in the world, viz ,India ,Srilanka , Vietnam , Indonesia , Kenya and Malawi .This study is based on an extensive field study of civil society organization in these countries . A considerable number of studies have attempted to explain empirically the relationship between trade openness and government expenditure. Rodrik , (1998), Adsera and Boix , (2000), and Albertos , (2002), proclaimed that existence of positive linkage.

2. Between trade openness and government spending is due to high compensation hypothesis where as Alesina and Spolaore ,(1997), Alesina et al (1997) , Frankel and Romer (1999) , and Bretschger and Hettich , (2002) , indicated that government size and trade openness are interrelated with country size .

16

Smaller countries tend to have higher trade shares than the larger countries as the same amount of trade flows represents a different shares of GDP .Alkan , et al .,(2009) in their paper investigated the importance of tea sector all over the world among major producer. Nagoor (2009) examined the performance of Indias tea exports and identified the underlying factors . The study also looked at tea exports and production response in major tea exporting countries under WTO regime . Nagoor and kumar , (2010) in their paper investigated that with the signing of the Free Trade Agreement with the Association of South East Asian nations , there are apprehensions that the consequent reduction in import tariffs will adversely affect the Indian tea industry . Adhikary and Maity,(2010) computed instability indices of various sections of export for 1966 - 1967 to 1986 - 1987 . Keeping all these studies in mind we now return back to our main study i.e, the study of analyzing the trend of Indias tea export in the scenario of trade openness . The next section will not only analyze the results but also we will try to explain the reasons behind these results . Finally , on the basis of our study we will suggest several policy prescriptions to take the advantage of trade openness for exporting tea from India. Review of literature is an integral part of any research study. It palys a significant role in shaping the purspective of researching to set the tone of the study. A huge volume of literature is avilable with regard to export of rice from india, particularly rice. Here, a brief attempts is being made to explore of a little of the vast aray of literature resources relating to export of rice from india to other countries. Maizels ,(1968) tested the hypothesis relation between exports and saving. Hetook annual data from 11 member nation of the overseas sterling area for the period1950 to 1960 and found a significant degree of correlation between savings and exports. Kelker and sharma (1976) examined the trend and determinants of indias export performance for the period 1961 to 1974. He concluded that reason for loss of indias export share in world market lies on supply as well as on demand side. 17

Kannan, (1986) analysed the export performance of agricultural commoditis from196869 to 1881-82. In case of almost all the commodities, incresed unit value was primarily an important factor in the achievement of higher export earnings. In case ofrice, marine products, quantum increse was reinforcing factor.The export of rice sugar and raw cotton were subject to considerable instability. Pahariya and Ahuja, (1986) applied the HeckscherOhilin Sumuleson model to indian economy to explain the commodity pattern of her trade. They concluded that physical capital intensity was not good predictor of indias tarde pattern as a single explanatory variable the human capital did better job than any other variable. Mukherjee, (1987) empirically investigated the relationship between exports and economic growth in India for the period 1950-51 to 1980-81.she observed the negative regression coefficients between GNP growth and export growth showing that 1 percent increase of bringing about any increase in income, was seen to be accompanied by decrease in income.Nayyar, (1987) studied indias export performance for the period 1970-85 as well as for two sub-periods 1970-78 and 1978-85.He argued that during 197078 ,various internal factors like decrease in agricultural production increased domestic demand for manufactured goods contributed to slowing down of export growth but after 1978external factors were responsible for slow growth. Tyagi, D.S. (1990) in his article analyzed the problems and alternatives related to Indian food economy. In his article he suggested that although a very well developed Statistical system exist in India, neither the degree of reliability is very high nor the statistic are available on time. so, immediate steps should have to be taken to improve the reliability and timeliness of basic information required for managing the food economy, Nandi and Biswas, (1991) tested two way causality between export growth and growth of income in India for the period 1960-1985.The econometric results showed 18

3.That in Indian context, causality ran one way only i.e. export growth-led growth of national income but growth of income had no impact on growth of export. Dutta, (1996), mentioned that a major problem of Indian rice milling industry is that, due to large varities in grades and grain sizes, machinary adjustment become different. De- husking paddy, seperation and polishing equipments require improvement in designs by incropting hydraulic and electronic controls. This is needed if Indian rice is to cater to the needs of the premium markets both at home and abroad. Patnaik, U. (1997) observed falling total area under food grains and decelerating growth of food grains outfood below the population growth rate during the period of structural adjustment. Durga, P.K. (1997) in his article also discussed the world rice market with properly of Indias rice export. Childs, N. & Burdett, A. (2000) in there article analyzed the U.S rice export market. This article breaks up the us rice export market by type of rice exported and describes recent trends within each market. In their article, they found that U.S share of global rice exports have declined since 1989. The U.S exports raise in all three form: paddy, brown and rough. However since the mid 1990s only rough rice has shown any sustained growth. Dorosh, P.A , (2001) in his article analyzed the issue of trade liberalization and food security with giving emphasis or focus on the rice trade between Bangladesh and India .From his study he found that the trade liberalization offers potential benefits for national food security by enabling a rapid increase of food supplier following domestic production short falls. Khan, A.U, (2004) in his article discussed growth and farmer related issues related to the Indian agriculture. In his analysis , he also included the impact of GREEN REVOLUTION on agriculture. Gruere, G. et al. (2004) In there article analyzed the potential effects of introducing GM rice in India with or without China.

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They also focused on 4 types of GM riceresistance to biotic and a biotic stresses, such as drought resistant rice and use a multi country , CGE model to stimulate their introduction in India. Wailes, E .T.,(2004) in his article discussed the various implication of the WTODOHA ROUND for the rice sector, In other words he analyzed the impact of WTODOHA ROUND on the rice sector.At the end of his study ,he found that the benefits 4.Such policy reform on a global basic will benefits Japan, China the Europe union and Australia by large measure and the policy reform one rarely zero sum as is suggested by the estimate given in his study . Barah, B.C,(2005) article analyzed the dynamics of rice economy in India a and he also discussed the emerging scenario &policy option related to the Indian rice economy .He also used spatio temporal rice related data from secondary sources pertaining to rice growing the areas to study the trends and growth pattern over the decades (1950-51 to 2001-02). He also discussed the poor performance of agriculture sector in eastern India & thus it requires the enhancement of rice productivity and rice based system by focusing & prioritizing the rise research in eastern India. Warr, P.G & Wollmer, F.T,(2005) in his article examined the long demand relationship of Thailand exports of rice drowning upon recent developments in the statistical analysis of economy time series and the inside of airsing from a recent debate on the elasticity of demand for manufactured exports from LDCs. Arelatively robust long run price elasticity of demand for rice is obtain to between -1.2ands 1.9. The small country hypothesis is rejected using the specification of the price normalized demand equation .They also found that the result of there analysis are relevant for current agriculture policy debate in Thailand. 20

Boriss, H.(2006) in his article analyzed the various aspects of US, Rice market. In his article, he also analyzed the various industry characteristics & production related torice in US.US rice policy & govt. programmes are also a part of his analysis He discussed various issues such as export import etc. related to US rice sector. Banik, N. (2007) in his article identified a set of factors that appear to be responsible for an increase in Indias export growth during recent years .He also examined the possible impediments to high export growth in a sustained manner . He found that increase in India exports during the year following 2000 is predominantly services driven and is attributed to increase in factor productivity , growth in world trade, an increase intra industry trade and external sector reform . He suggested that India should be willing to take a more constructive approach ,along with other developing countries, at multilateral forms such as WTO. Slaton, T.& Timmer ,P(2008) in his article analyses the crisis. in the world rice market .in this article ,they analyses that under the leadership of U.S, the countries like Japan ,China & Thailand can solve the problem of world rice crisis Pandian, B.J.,(2009) in his article discussed about the System of Rice Intensification(SRI) in Tamil Nadu. In his article, he has mentioned that the System of Rice. 5.Intensification is a holistic agro-ecological crop management technique seeking alternatives to the conventional high input oriented agriculture through effective integration of crop, soil, water and nutrient management. He further stated that SRI grown rice is introduced to the US food trade & consumers also. He also discussed the Chinese experience related to the SRI. Mitra, S & Jasling T (2009) In their article analyzed export restrictions from two different but related angles. In their analysis, they dicussed the welfare implications of export restrictions both for the country imposing 21

such measures as well as for the rest of the world. They further tried to explore an overview of how export restrictions have been addressed in trade negotiations and agreements and other such efforts to achieve greater market stability. They also stated the global and domestic impact of export restrictions and tried to estimate the change in world welfare due to export restrictions. Kulkarni, K. G (2009) in their article analyzed the effects of Indias trade policy on rice production and exports. They analyzed the economic effects of such trade policy in the framework of Comparative Static Model that explains the costs and benefits of tariffs and subsidies. They found that the protectionists trade policy actions undertaken in 2008 resulted in an estimated $ 260 million increase to national welfare consumers benefited from lower prices and the loss to producers was offsets the govt.aid, including debt reduction. While its policies appeared to limit the transmission of higher world prices to Indian consumers, Indias monopoly power in the production of rice could have limited the full effect of price decrease. Iqbal,B.A,& Merwe, T.V.D(2010)in their article discussed the issues of Indian food crisis. They also analyzed the issue of Indian food crisis by examining the reasons for food crisis, existing trends in production of food crops, state wise procurement of wheat, and rice, per-capita availability of food grains, trends in price rice, genesis of crises and fear that Indian planners are having in mind. They also discussed the currents trends and economic impacts of food grains and at the end, they found that slow agricultural growth has been a cause of food crisis. Sharma , A , (2011) in his article analysis about the Rosola basmati rice .com , an agro-product export comp. that intoduces high quality of Basmati rice and the various issues related to its export from India. In his article he also talked about royal basmati rice which is also another variety of Indian rice that the rosola BASMATI RICE com. company also supplies to

22

many foreign markets.2.3. Hence, this attempt to review a few of the studies that had been conducted in this field not only brought certain trends and charecteristics of rice trade in india. 6. Also can serve the purpose of forming hypothesis of this study. So, kepping all these studies in mind, we came back to our main study, i.e. Export of rice from India to abroad. Radha Charan Rabidas Roll No.: 15 (4th Sem) . There are vast literature to review regarding the pattern and trend of rice production in India. Regarding this concept many researchers and scholars contributed by their empirical works. 7. The following sections an attempt has been made to review some ofthe available literature on the pattern and trend of rice production in India. SOME MAJOR EMPERICAL WORKS: Blyn, (1966), in his article he found that as every food grains plays an important role in Indian food economy. There is no separate government policies for boosting rice production. He also mentioned that performance of Indian agriculture after independence was much better than before independence. Sen,A.K. (1967), in his article analysis that the production related issues of rice. In his article he also discussed that the high rates of increase in production, the instability or year to year fluctuations in rice output increased during the post-green revolution period particularly in the second decade. Many explanations are offered for this phenomenon. Bhuian,(1992), mentioned that there is a need to study the input use pattern and the practices followed by the farmers in paddy growing regions. Since water is also very important input in rice production, so nearly half of irrigation water is used for rice production. Tiwari, K.N. (2002), according to him to achieve rice production target by 2012, balanced and adequate phosphorous and potassium fertilizer as well as nitrogen, sulphur and zinc is essential.

23

To improved rice production and productivity in rainfed areas may not only help the resources. For farmers, but also substantially increased food production. He also mentioned that there is urgent need to educate farmers about the importance of balanced used of fertilizers in increasing yields and profits in rainfed rice ecology. Uphoff and Randriamiharisoa,(2002), in their study they found that more rice can be produced by using less water, provided that concurrent changes are made. 8. Way that plants, soil nutrients are managed. Ramasamy, (2003),mentioned the production elasticity estimated by the studies conducted in different states over the period indicates that either there is no production response to various factors inputs or the response is declining. The total factor productivity which grew atan average rate of 1.37 percent per annum in the 1970s and 1.33 %in 1980s.Kapur, B.N.(2003), showed that the status of rice production in the state of Haryana has also been remarkable with the production of 2.68 million tones in the year 2000-2001 over an area of 10.5 million hectare contributing to 3.16% of total production in the country. Vittal, K.P.R. et al. (2004), in their article, they discussed the two main seasons related to rice production in India. They also analysed the method of rice production in India. They also calculated the area and yield growth rate of each district in India. Although the rate are treated asstagnant and others were decided based on the sign positive ornegative. Ravichandran, S and Singh, (2005), in their article they found that during the year 2002-2003, the production of rice was declined due to the draught. The stock of rice reduced from25.62million tones in 2001-2002 to 19.37million tones in2002-2003. From their article we can say that the intensity of draught experienced in year2002-2003 and the decline in ricereserve. Barah, B.C. (2005), state that the rice sector has witnessed rapid dynamism in production processes. After climbing a height of fourfold increase in production during past four decades, the production curves have started showing 24

downward trend and productivity decelerating since the later half of the 1990s. Leip, A.and Bocchi, S. (2OO7), in their article they state that rice cultivation and production is both an important sequester of carbondioxide from the atmosphere an important source of green house. 9. In this context they given example as, in 2004 the global paddy rice output was 607.3million tones at 14% moisture content .At the gain/straw ratio of 0.9 for most currently planted rice varieties, the global rice straw output in 2004 was about 676million tones at 14% moisture content. This means that in 2004,rice sequestered about 1.74 billion tones of carbondioxide from the atmosphere to produce about 1.16million tones of biomass at 0%moisture content. Sanjay. K. Srivastava, et al. (2009), in this paper they concern the impact of climate change on agricultural production as well as rice production. Increase in temperature, higher carbon-di-oxide concentrations and abnormal patterns of precipitations coupled with higher frequency and intensity of drought and floods are likely to enhance considerably the climate risk to the major agricultural ecosystems. Towards this, the study on climate risk assessment to rice based agro ecosystems, which support the livelihood security for very large number of poor and marginalize in India has been reported this paper.2.3. In the next section ie.section 3 we will study the pattern and trend of rice production in India. We will also analyse the research result explaining the reason behind these result. Finally, like anyother research work we will also indicate the line of our future research. Rupak Kumar Doley. 10. Review of literature is an indespensible part of any research works that provides an important and usefull track to frame their research works. There are sufficient literature regarding the current export situation of coffee from India, contributed by many different researchers and scholars. Now we will try to review those literature that match with the

25

concept of coffee export from India.2.2. Dudeja, (1989), in his article, India hopes to export surplus coffee publish in Tea and Coffee Trade Journal, mentioned various demands of the coffee exporters and coffee growers in order to increase the internal as well as external demand. Mehta,(1996), in his article, Indian coffee exporters aims for US market mentioned different steps, which are taken to increase the export of coffee in US market. Gahiro, L. (2000), assessed the fluctuations in Burundis coffee production in different years and also the results of the slight change in coffee marketing structure in 1991 due to the partial liberalisation initiated by the World Bank. Lewin, B.and Giovannucci, D. (2002), in their article, Global Supply and Demand: New Paradigms in the Coffee Markets, assessed the larger global situation in terms of both the dominant supplying countries and the evolution of demand. Achoth, L. (2005),mentioned the status of the Indian coffee industries as an export industries with 70% of the total production being exported. He also mentioned the various research activities of the Coffee Board of India to find out the comprehensive problem of the mould contamination in coffee after the country received its first report of rejection of coffee from Africa during 1994, which left the coffee producing countries with no alternative but to fall in line with international standards. Bhat, R. V. (2005), described the organisation and the activities of different research institutions and training centres by the Coffee Board of India in order to maintain

11. The coffee quality and safety management and control in India with positive effect. Potts et al. (2007) assessed the need for economic stability of coffee producers, its stratigies for development and put forwarded some specific recommendations for actions. Mercereau and Vignault, (2008), identified the status of the quality of coffee and coffee industries in India with Italy and ex-communist block as the major export destination.

26

They also mentioned that the sustainable standards have low penetration in the Indian coffee industries. Giovannucci,D. and Potts, J. (2008), mentioned that among the certified commodities, the certified coffee has been growing at a much faster pace than any other segment of the coffee industry after its first trade in 1967 through fair trade. Mohan, S. and Russel, B. (2008), in their paper modeled the relationship between the producers and the world price of coffee in three different countries, viz., Brazil, Guatemala and India allowing for the effects of changes in market structures. They also found that liberalization has benefited producers substantially in terms of higher real coffee prices and a higher share of the world price of coffee. Mutandwa et al. (2009), using the Boston consulting group (BCG) matrix for analyzing the market for coffee export in Rwanda, recommendate that, if the role of coffee export to the country economic vistas is to be consolidated, there is a need of understanding the social, economic, cultural, institutional and technological factors affecting sub population in the importing countries. They also discussed appropriate strategies for their destination. Smith, E.S. (2010), in his thesis, he found the Fair Trade to be the key contributor to sustainable income- generating strategies and socio- economic stability among rural and small scale coffee farmers. Mohapatra,(2010), mentioned that Indias coffee exports may be hit due to the higher prices that received. 12. The domestic producers in the domestic spot market. In the paper, he also mentioned that the domestic player can expect much better result from high international future price. Jonsson, L.(2010), in his paper focused the attention on describing political rent seeking on the Rwandan coffee sectors institutional structure. In the paper, it is also mentioned that , the institutional changed with the liberalisation of the coffee sector and this change, in turn, provided an opportunity to analyse how and why political actions

27

taken that changed the institutional structures and thereby curbed corruption. Govindan, A. (2010), identified the decline in the production and the increase in the consumption of coffee in India. He represented the imposition of production subsidy in order to increase and improve the quality of coffee and also mentioned the imposition of export susidy in order to export Indian branded value added coffees and high value coffees to the far off markets, such as United States, Canada and Japan. Daumal, M. (2010), in the paper determined through time series regression whether the regional disperities are linked to countries (India and Brazil) trade openness with the result that Brazils trade openness has contributed in reducing the regional inequalities, while, the opposite result has been found in case of India.2.3. After reviewing and keeping all those study in mind now we are back to our main study, Current Export Situation Of Coffee From India, corresponding to the future analysis of the research results along with the explanation of the reason behind these results.

28

Chapter III

Tea And Coffee

CHAPTER III

3. HISTORY OF TEA
3.1. Introduction
Tea, discovered by Chinese Emperor ShenNung in 2737 B.C., brought fortune to England as well as loss of her colonies in the New World. when dried leaves blew into his cup of hot water, the beverage he discovered would cause sensations around the world. During this time, water was always boiled for hygienic reasons. The pleasant aroma and refreshing taste enchanted him and soon everyone in the realm was drinking tea. In the 1880's, America came to the forefront as the biggest importer of tea due to faster clipper ships and the ability to pay its debts in gold. A tea plantation owner introduced iced tea to the St.Louis World's Fair in 1904. Tea is a natural source of the amino acid theanine, methylxanthines such as caffeine and theobromine and polyphenolic antioxidant catechins. It has almost no carbohydrates, fat or protein. It has a cooling, slightly bitter and astringent flavour.

Origin of Tea in India

In south India, Dr.Christie was the first to experiment with the growing of tea plants in the Nilgiris in 1832 and some of his plants were distributed to various parts of the Nilgiris hills for trial. In 1834, a few plants grown from the seeds brought from china were again planted in these hills. The earliest record of commercial planting in Kerala was in peermade during 1875.

29

The development of Kannan Devan Hills by James Finlay and Co. In 1878 with tea as an exclusive crop, is a landmark in the history of tea planting in this part of the country. In the late 1830s, the tea plant was growing wild in the jungles of northeast Assam. In 1823 and 1831, Robert Bruce and his brother Charles, an employee of the East India Company, confirmed that the tea plant was indeed a native of the Assam area and sent seeds and specimen plants to officials at the newly established Botanical Gardens in Calcutta. In 1788, the British botanist, Joseph Banks, reported to the British East India Company that the climate in certain British controlled parts of North East India was ideal for tea growingstarted cultivation around the town of Darjeeling in the foothills of the Himalayas in the mid 1850s. By 1857, between 60 and 70 acres were under tea and whereas the China variety of the tea plant had not liked the condition in Assam, here at elevations of 2500 to 6000 feet, it grew well the company pushed on into Terai,Dooars and even into the remote Kangra valley, 800 miles west of Darjeeling. 3.2.Modern tea production in India India was the top producer of tea for nearly a century, but recently China has overtaken India as the top tea producer due to increased land availability. Indian tea companies have acquired a number of iconic foreign tea enterprises including British brands Tetley and Typhoo. India is also the world's largest tea-drinking nation. However, the per capita consumption of tea in India remains a modest 750 grams per person every year due to the large population base and high poverty levels. The major tea-producing states in India are: Assam, West Bengal, Tamil Nadu, Kerala, Tripura, Arunachal Pradesh, Himachal Pradesh, Karnataka, Sikkim, Nagaland, Uttarakhand, Manipur, Mizoram , Meghalaya, Bihar, Orissa.

30

3.3. Tea Exports from India

Tea is a beverage made by steeping processed leaves and our realm earns more foreign exchange while exporting tea. In the early 1920s, world exports of tea were around 310,000 metric tons per annum. Of this, 75 percentages came from British plantations in India and Ceylon and 9 percentages from Dutch producers in the Netherlands East Indies. During this time, the United Kingdom absorbed 60 percentage of total world tea export. Indias export was largely agro-based during 50s. Three principal traditional items-textiles, Jute manufactures and tea accounted for nearly 54 percent of the countrys export. Contribution of all primary and traditional items was about 85 percent of the total export. The resources of the world may be utilized efficiently through the foreign trade. The recent phenomenon of globalization and liberalization also encourage the foreign trade. Foreign trade has been proved beneficial for the members countries. Trade among countries accelerates the development process of those countries. Indias share in the world exports which had fallen 0.53 percent in 1991 from 1.78 percent in 1950, has shown reversed trends and has improved to 1 percent in 2009 and further to 1.3 percent in 2011.

Exports to Major Destinations

Indias export to major destinations during the year 1960-61 Indias major partner was UK followed by U.S.A, Japan, Russia, Germany and France. They accounted for 57.4 percentage of our total export. The share of individual country to total Indias export wasUK (26.9%), Japan (5.5%), Russia (4.5%), Germany (3.1%) and France (1.4%). 31

The policy of counter trade helped in rapid expansion of trade between India and USSR. As a result, USSR became the leading market for India during the year 1970-71. USSR remained the leading market for Indias export during the 80s followed by USA, Japan, UK and Germany. Germany became fourth largest export partner of India during the year 1980-81. During the year 1990-1991, Russia remained the major export market followed by USA, Japan, Germany, UK, Belgium and France. During the year 1996-97 Indias major export market was USA followed UK, Japan, German, Belgium, Netherland and France. The significant growth rate and unification in the form of European Economic Community facilitated Indias export to European countries. Hence the share of export increased in European nations. The country wise share of export was USA 19.8 percent, UK 6.1 percent, Japan 6.0 percent, German 5.6 percent, Belgium 3.3 percent, Netherland 2.5 percentand France 2.2 percent. These 6 countries accounted for 45.5 percent of total Indias export. Indias export destinations during 2010-11 was United Arab Emirates at the value of 34,349.10 US$ Million, U.S.A 25,548.40 US$ Million and China 19,615.85 US$ Million. 3.4.Characteristics Of Tea The Botanical name of tea is Camellie sinensis. It is a broad-leaved evergreen tree crop. It is belived to have originated in China and to have spread from that country into other parts of South East Asia. The tea bush yield a perennial crop and flourishes only in areas with well drained and slightly acidic solids and where there is no extremely cold season. It is however tolerant of a wide range of warmth a sprevails in tropical and sub tropical regions, as the shrub is moisture loving it requires humid air and sample rainfall

32

is distributed in such a way, over the year that continues water supply is assured through out the growing season. The young tea plant grows to height of thirty feet but it is generally purned to three to five feet. The young tea leaf shoots or flushes as they are called plucked during the active growing season. In Ceylon, South India and Taiwan the leaves may be ready for plucking every seven to ten days throughout the year. But in North India, China and Japan there are mush fewer plucking. For green tea the leaves are rolled and fires immediately and are not allowed to ferment. Thus, botanically the two types of tea black and green are identical and the difference lies in the processing. Oolong teas are commercially much less important than other two types. They are self-fermented and are intermediate in flavour and colour.

Economic Importance Of Tea

Economic from a luxury, which only the rich could afford, tea has now become the world cheapest and most widely used drink other than water, although in terms of total trade alone, it rank much below coffee. Economically seeking, tea is an extremely valuable source of much needed foreign exchange, including the so called hard currencies, for a number of developing countries, especially Ceylon and India. Tea is also an important source of Government revenue being subject to export and excise duties, ceases and sales taxes in a number of producing and consuming countries. Moreover, the clearing of jungle infested lands, the construction and financing railways, roads, schools and hospitals and the provision of wholesome drinking water 33

have been some of the other important contributions of the tea plantation industry to the economies of the tea producing countries, particularly in Ceylon, India and China. The tea industry is an vitally important contributor to national income and employment, foreign exchange earnings and tax revenue. In India, its economic position is very important although it does not cover even one half percent of the total cultivated area in the country. It is the second leading item of Indias export trade. While trade is a crop raised almost entirely in developing countries (Japan and USSR being the major exceptions). It is consumed in both developing and developed countries. It is traditionally an English drink, but in Ireland, Australia, NewZealand, USSR, in most of the far Eastern countries and in number of near Eastern and African countries like Iraq and Egypt. It is now the most important beverage. This is to say, tea is the national drink in countries which between them cover some 2/3 rd of the population of the world. In countries like Canada, The Union of South Africa, The Netherlands, Turkey and Morocco, enjoys a position roughly equal to that of other leading beverage-coffee.

3.5.TYPES OF TEA
There are several types of tea and what most of drink regularly is black tea. Besides black tea the other families of tea manufactured are White tea, Green tea and Oolong tea.

34

Black Tea
Black tea is a type of tea that is more oxidized than other teas. It is generally stronger in flavor than the less oxidized teas. Black tea retains its flavour for several years. In China and neighboring countries it is known as Red tea. Black tea is fully fermented, so it has approximately 20% of the caffeine in a cup of coffee. Black teas help maintain cholesterol levels that are already within the normal range, as well as helping to maintain cardiovascular function and a healthy circulatory system

White Tea
White tea is the worlds rarest tea as it can only be picked for a few weeks in any one year. Authentic white tea is only grown in the Fujian province in china where the exact method of processing is kept secret. White tea is made from a specific tea plant variety, as well as a particular processing method which raises small silvery hairs on the leaves and buds. White tea is the purest and least processed of all teas. This loose leaf tea has very little caffeine and brews a light color and flavor. White teas also contain healthy antioxidants and are the best for skin.

Green Tea
Green tea plants are grown in rows that are pruned to produce shoots in a regular manner, and are generally harvested three times per year. Green tea is the result of curing the young camellia leaf using various methods and degrees of heat. Green tea is the most popular type of tea, mainly because it is the beverage of choice in Asia. Some loose green teas are scented with flowers or mixed with fruits to create scented or flavored teas.
35

This tea has only 5-10% the caffeine in coffee per cup. Green teas contain healthy antioxidants. They help maintain cholesterol levels that are already within the normal range, are good for skin and teeth, and can be used as part of diet to maintain a healthy blood sugar level.

Oolong Tea
The best oolong tea is picked by hand during the spring and winter months in southeast China and Taiwan. Oolong teas are partially oxidized teas and undergo the most difficult and time consuming processing method. Oolong tea are semi-fermented and the leaf is given a brief wither in the sun for an hour, then after cooling, it is lightly manipulated in the hands till in turns had and develops a slight fragrance.Oolong tea, also known as wu long tea, is full-bodied with a flavorful fragrance and sweet aroma. It is semi-fermented, which gives it approximately 15% of the caffeine in one cup of coffee. Most people commonly recognize oolong tea as the Chinese tea served in Chinese restaurants. Oolong teas can be a healthy part of your weight loss plan.

3.6.PRODUCTION OF TEA Geographical Location of Tea Growing Areas

Tea is mainly an export crop. This crop requires special climatic conditions and hence commercial tea industry of the world concentrated in the Southern and Eastern Asia due to the following reasons: The tea industry requires an abundant supply of cheap labours. There are a number of operations in the tea culture, of which plucking and preparing the leaves is a tedious task which requires only hand labour.

36 The Asian countries are densely populated and labour cost relatively low. This accounts for the successful tea plantations in these countries.. Market is huge because of confirmed tea drinkers. A special climatic conditions requires rainfall constantly, absence of dry winds and humid air. The tea industry in India centres in the flat, alluvial lands on either side of the Brahmaputra River and in the region immediately South of Assam Hills. This part of the country has very high rainfall averaging from 80 to 100 inches per year in the tea regions proper. High humidity heavy dews arid morning fogs favour rapid development of young leaves. From December to February however this part of India has a cool season at which time the shrubs remain dormant. During the remaining nine months leaves can be picked every 8 or 9 days. A small tea area lies in the foothill of Himalayas, near Darjeeling where the tea gardens are at altitudes of upto 4,000 feet. Here the slow growth of the plant resulting from lower temperatures leads to the production of high-grade leaf. The yield per ace, however is considerably less than in the low hands. In the Southern India, tea is growing along the rainy west flanks of the western ghats. As in Ceylon, here plantations lie at greater altitudes than in Assam. The growth of the leave is not affected by unfavorable season and picking can continue throughout the year. Because of the variation in climate, there is difference in productivity between the areas.

37

The Region in North East India

They could be classified into five separate regions. 1.Assam Valley 2.The Surma Valley or Cachar 3.Darjeeling 4.Dooars and Terai and 5.Tripura

In these regions, conditions are ideal for tea cultivation in India. The board was set up by an act of parliament in 1942. Until 1995 the Coffee Board marketed the coffee of many growers from a pooled supply, but after that time coffee marketing became a private-sector activity due to the economic liberalisation in India. The Coffee Board's traditional duties include the promotion, sale and consumption of coffee in India and abroad; conducting coffee research; financial assistance to establish small coffee growers; safeguarding working conditions for labourers, and managing the surplus pool of unsold coffee.

3.11.Indias coffee growing regions

Nearly 390,000 ha are planted in coffee in India, 70% of which are small farms of less than 10 ha. The vast majority of coffee is grown in the three southern states of Karnataka (53%), Kerala (28%), and Tamil Nadu (11%). Eighty percent of Indias arabica coffee is grown in Karnataka. In this region, arabica coffee is grown at elevations

38 of 1000 to 1500 m, with some production up to 2000 m. Robusta, of course, is grown at lower elevations. Some familiar regional designations are Chikmagalur, Coorg, and Mysore (all in Karnataka), and Madras (Tamil Nadu). Coffee is grown in three regions of India with Karnataka, Kerala and Tamil Nadu forming the traditional coffee growing region of South India, followed by the new areas developed in the non-traditional areas of Andhra Pradesh and Orissa in the eastern coast of the country and with a third region comprising the states of Assam, Manipur, Meghalaya, Mizoram, Tripura, Nagaland and Arunachal Pradesh of Northeastern India, popularly known as Seven Sister States of India". Indian coffee, grown mostly in southern India under monsoon rainfall conditions, is also termed as Indian monsooned coffee". Its flavour is defined as: "The best Indian coffee reaches the flavour characteristics of Pacific coffees, but at its worst it is simply bland and uninspiring. There are over 1, 71,000 coffee farms in India, cultivating nearly 900,000 acres of coffee trees. Most coffee production in India is on small farms, with over 90 percent of all farms consisting of 10 acres or fewer. However, such farms account for just over half of all land used for coffee production and a minority of all coffee produced. Most coffee in India is grown in three states: Karnataka, Kerala, and Tamilnadu. These states accounted for over 92 percent of India's coffee production in the 2011-2012 growing season.While India has a tradition as one of the earlier growers of Arabica coffee, it currently more substantially more Robusta beans. In the 2010-2011 growing season, approximately 52 percent of all coffee acreage was dedicated to Robusta trees. However due to the higher yields of this tree, Robusta accounted for 64 percent of all coffee produced in India.

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3.12.Exports of coffee from India

India exported over 440,000 pounds of coffee in the 2005-2006 season, slightly less than in 2005 and nearly 5 percent less than 2004. Over a quarter of the India's coffee exports go to Italy. Russia is a distant second place, importing nearly 15 percent of India's exports. India is the sixth largest (after Brazil, Colombia, Vietnam, Indonesia and Ethiopia) producer of coffee producing an estimated 290,000 tonnes (4.85 million bags) of coffee during 2007 season ended in October. Exports increased significantly to 291,000 tonnes in 2010. Large-scale berry borer pest infestation in Karnataka, the largest coffee growing state in India, is seen as threat to the 2009-10 crop prospects in addition to erratic monsoon rainfall. India was the eight largest exporter of coffee in the same year. Major importers of Indian coffee include Italy, Russia, Germany, Belgium, Spain and Slovenia. India grows both Arabica (around 1/3 of production) and Robusta (around 2/3 of production) varieties of coffee. The total planted area of coffee covers around 380,000 hectares mainly in the traditional coffee growing states of Karnataka (58 %), Kerala (22 %) and Tamil Nadu (8 %). Non-traditional coffee growing areas are to be found in Andhra Pradesh, Orissa and North-East India. Major coffee growing districts include Kodagu and Chikmagalur in Karnataka and Wyanad in Kerala. India's coffee plantations provide employment (both permanent and casual) to almost 600,000 persons. Domestic per capita coffee consumption is negligible especially in regions other than South India when compared to black tea consumption. The recent proliferation of various chains of cafes and vending machines in urban areas across India has given a boost to the

40 popularity of coffee among consumers. Coffee (robusta) futures are traded at the MCX and NCDEX commodity exchanges. Online spot trading of coffees is planned for a launch in 2008.

Growing conditions
Today, coffee is grown almost everywhere along the equatorial belt. After sowing, three to four years pass before the first harvest. Depending on the growing conditions and care, the useful life is 20 to 30 years. A humid-dry alternating climate is ideal. The flowers need a lot of sunshine and rain. Temperatures below the freezing point will destroy the plants. Arabica thrives best at altitudes of 6.000 to 2.000 meters at a temperature of 15 to 24 C, Robusta at altitudes of 200 to 900 meters, at a temperature of 24 to 29 C. The tropical highlands are conducive to the aroma, since the coffee grows and matures more slowly there.

Cultivation
The traditional method of planting coffee is to place 20 seeds in each hole at the beginning of the rainy season. This method loses about 50% of the seeds' potential, as about half fail to sprout. A more effective method of growing coffee, used in Brazil, is to raise seedlings in nurseries that are then planted outside at six to twelve months. Coffee is often intercropped with food crops, such as corn, beans, or rice during the first few years of cultivation as farmers become familiar with its requirements.Of the two main species grown, arabica coffee (from C. arabica) is generally more highly regarded than robusta coffee (from C. canephora); robusta tends to be bitter and have less flavor

41 but better body than arabica. For these reasons, about three-quarters of coffee cultivated worldwide is C. arabica. Robusta strains also contain about 4050% more caffeine than arabica. For this reason, it is used as an inexpensive substitute for arabica in many commercial coffee blends. Good quality robusta seeds are used in traditional Italian espresso blends to provide a full-bodied taste and a better foam head (known as crema). However, Coffea canephora is less susceptible to disease than C. arabica and can be cultivated in lower altitudes and warmer climates where C. arabica will not thrive. The robusta strain was first collected in 1890 from the Lomani River, a tributary of the Congo River, and was conveyed from Zaire to Brussels to Java around 1900. From Java, further breeding resulted in the establishment of robusta plantations in many countries. In particular, the spread of the devastating coffee leaf rust (Hemileia vastatrix), to which C. arabica is vulnerable, hastened the uptake of the resistant robusta. Coffee leaf rust is found in virtually all countries that produce coffee. Over 900 species of insect have been recorded as pests of coffee crops worldwide. Of these, over a third are beetles, and over a quarter are bugs. Some 20 species of nematodes, 9 species of mites, several snails and slugs also attack the crop. Birds and rodents sometimes eat coffee berries but their impact is minor compared to invertebrates.In general, arabica is the more sensitive species to invertebrate predation overall. Each part of the coffee plant is assailed by different animals. Nematodes attack the roots, and borer beetles burrow into stems and woody material, the foliage is attacked by over 100 species of larvae (caterpillars) of butterflies and moths. Mass spraying of insecticides has often proven disastrous, as the predators of the pests are more sensitive than the pests themselves. Instead, integrated pest management has developed, using techniques such as targeted treatment of pest outbreaks, and

42 managing crop environment away from conditions favouring pests. Branches infested with scale are often cut and left on the ground, which promotes scale parasites to not only attack the scale on the fallen branches but in the plant as well.

3.13.Process of Monsooning:
Monsooned coffees are prepared at the curing factories situated on the west coast. Only whole crop Arabica Cherry and Robusta Cherry coffees are selected for monsooning. In order to ensure the quality of monsooned coffee, only A grade of both Arabica Cherry and Robusta Cherry are subjected to monsooning. The Process of monsooning is carried out from June to September of a year when the south-west monsoon is very intense on the west coast. The cherry coffee is evenly spread in thick layers in airy godowns, open on all sides and raked frequently. The coffee is packed loose in gunny bags and stacked in piles with sufficient space between rows for the monsoon air to circulate freely around the bags. The cherry coffee absorbs moisture from the humid monsoon atmosphere. The beans swell up to nearly double the size and the colour of the beans change to pale yellow/straw colour. The coffee is bulked and repacked at frequent intervals or poured from one bags to another to prevent mould growth on the beans and to ensure uniform monsooning. The monsooning process is completed in 12 to 16 weeks. At the end of monsooning, the coffee is polished and graded, based on the size of the beans, as per the standards laid down by the Board. The monsooned coffees are fumigated to prevent weevil attack.

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Chapter IV

Data analysis and Interpretation

DATA ANALYSIS AND INTERPRETATION

INTRODUCTION

Based on the logic extended in Chapter 1, In this chapter an attempt is being made to analyze the data collected and to interprete them. The analysis is made to study about the trend in tea and coffee production and export in India. It is also made to find the future growth of production and export of beverages in India.

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Table No 4.1

COUNTRYWISE TEA PRODUCTION IN WORLD

COUNTRY
CHINA INDIA SRILANKA JAPAN VIETNAM KENYA OTHERS

PERCENTAGE
32 27 8 4 4 10 15

The Table 4.1 shows the countrywise production of tea. China occupies a first place in producing tea with 32% and India in second place with 27%.

45

Chart No.4.1

PRODUCTION OF TEA IN WORLD

46

Table No 4.2

PRODUCTION OF TEA IN INDIA

The Table 4.2 shows the Indias tea production in the past 8

years

2005-2012. The production was increasing and decreasing every year. During the last year production was declined compared with previous year.

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Chart No.4.2 PRODUCTION OF TEA IN INDIA

YEAR 2013 2014

PROJECTED VALUE 9,00,000 9,12,000 9,18,000 9,27,000 9,33,000

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2015 2016 2017

Table No 4.3

Trend Analysis

PRODUCTION OF TEA

The above table 4.3 shows that the trend analysis result for production of tea in India. The result of trend analysis shows, compared with the current trend the production rate will decrease but there will be a growth of production in future.

49

Chart No.4.3

Trend Analysis
PRODUCTION OF TEA

50

Table No 4.4 EXPORT OF TEA IN INDIA

YEAR 2005 2006 2007 2008 2009 2010 2011 2012

EXPORT IN TONES 8,00,000 7,80,000 8,15,000 7,24,000 7,42,000 7,45,600 7,79,000 8,19,000

The above table 4.4 shows the Indias tea export in the past 8

years

2005-2012. It can be observed that Indias tea export was ups and downs in

the above given periods. During 2012 there was sharp increase in tea export to 8,19,000.

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Chart No.4.4 EXPORTS OF TEA IN INDIA

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YEAR 2013 2014 2015 2016 2017 PROJECTED VALUE 7,80,000 8,87,000 9,00,000 9,08,000 9,15,500

Table No 4.5

Trend Analysis

EXPORT OF TEA

The above table 4.5 shows that the trend analysis result for export of tea in India. The result of trend analysis shows the positive result only. It gives growth level in future also.

53

Chart No.4.5

Trend Analysis
EXPORT OF TEA

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Table No 4.6

COUNTRYWISE COFFEE PRODUCTION IN WORLD

COUNTRY
BRAZIL COLUMBIA VIETNAM INDONESIA MEXICO INDIA OTHERS

PERCENTAGE
33.16 11.65 10.61 5.97 4.59 4.60 28

The Table 4.6 shows the countrywise production of coffee. Brazil occupies a first place in producing coffee with 33.16% and India in sixth place with 4.60%.

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Chart No.4.6

PRODUCTION OF COFFEE IN WORLD

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Table No 4.7

PRODUCTION OF COFFEE IN INDIA

The Table 4.7 shows the Indias coffee production in the past 8

years

2005-2012. The production was increasing and decreasing every year. The last two years production was declined compared with 2010 but there will be a growth in last year.

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Chart No.4.7 PRODUCTION OF COFFEE IN INDIA

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Table No 4.8

Trend Analysis

PRODUCTION OF COFFEE IN INDIA

YEAR 2013 2014 2015 2016 2017 PROJECTED VALUE 2,95,000 2,40,000 2,76,000 2,82,000 2,94,000

The above table 4.8 shows that the trend analysis result for production of coffee in India. The result of trend analysis shows the positive result only. It gives growth level in future also.

59
Chart No.4.8

Trend Analysis
PRODUCTION OF COFFEE

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Table No 4.9

EXPORT OF COFFEE IN INDIA

The above table 4.9 shows the Indias tea export in the past 8 years 2005-2012. It can be observed that Indias tea export was ups and downs in the above given periods. During the period of 2012 export
was increased than for previous year.

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Chart No.4.9

EXPORT OF COFFEE IN INDIA

62

YEAR 2013 2014 2015 2016 2017

PROJECTED VALUE 2,00,000 1,97,000 2,03,000 2,18,700 2,24,000

Table No 4.10

Trend Analysis
EXPORT OF COFFEE

The above table 4.5 shows that the trend analysis result for export of tea in India. The result of trend analysis shows a slide decline in coffee export but there will be a growth in future exports.

63

Chart No.4.10

Trend Analysis

EXPORT OF COFFEE

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Chapter-V

Findings And Suggestions

CHAPTER-V

FINDINGS AND SUGGESTIONS

5.1.FINDINGS

India has exported about 8,19,000 tones of tea and 2,05,000 tones of coffee in 2012. India occupies a second position in tea production in the world. India occupies a sixth position in coffee production in the world. India accounts for 28% of production of tea in world. India accounts for 4.60% of world coffee production. There was an increasing and decreasing in the production of both tea and coffee in India. The production of tea and coffee was affected because of many diseases affected to the plants. There was an continuous growth in export of tea in India, but there was an fluctuations in export of coffee from India.

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5.2.SUGGESTIONS

The total exports have increased at an annual rate of 28.80 percentage.

The declining yield of coffee in the situation of increasing demand for exports requires attention.

The farmers may be encouraged to increase the area under reproduction are to carry out research and development to improve the coffee seeds. In these regard fertilizers and other improved inputs can be introduced.

The declining tea export requires much attention. The major reason for declining export is the increasing competition, poor quality and effects of pesticides.

The tea and coffee board have to make any financial assistance to the small growers to increase the production.

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5.3.CONCLUSION

This study was carried out to analyse about the export performance of tea and coffee in India. The study particularly aimed at analyzing the production and export performance of two beverages namely tea and coffee. Using Trend Projection method the future growth of Indias production and export tea and coffee were analysed. From the analysis the study would conclude that while the production performance of both tea and coffee were increasing. The effective step to increase the production of tea and coffee is necessary to increase the exporting. Therefore it can be conclude that the country may encourage the producers to increase the production and export of beverages.

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Bibliography

BIBLIOGRPHY

International coffee organization-coffee profile accessed through internet Coffee board of india- coffee profile accessed through internet Agricultural statistics republished by ministry of agriculture accessed through internet Tea and coffee export statistics published by economic times accessed through internet

Research Methodology - C.R.Kothari

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