Global recession can hit coffee sector hard: UPASI

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{image-coffee sector_03112008.jpg}Bangalore, Nov 3: Coffee may become the worst affected among the plantation crop due to global recession, United Planters Association of South India (UPASI) Chairman Damodar Prasad Maheshwari said on Monday, Nov 3.

Speaking here, he said at present most of the plantation crops were profitable to the grower. But the future looked bleak. ''As a whole plantation crops are doing well. The demand for tea will result in demand outgrowing production, while rubber production is at a comfortable level. But Coffee, due to the financial crisis may feel the impact due to falling prices,'' he opined. He said there would not be much pressure on pricing as commitments made earlier would stand good. But certainly the impact would be felt as demand for new season starts.

''As far as Tea is concerned the demand is more than the supply. 30 million Kg was the demand, while the production was only 20 million kg. By the year end the shortfall may grow to 15 million kg,'' he said.

The shortfall in north India could go up to 25 per cent. This would result in prices shooting up, he said.

''Rubber is doing well. Whenever there is decline in oil prices the price of Rubber also comes down. But now Rubber prices is good.

Overall, for plantation crops like Coffee, Tea and Rubber the situation is good, but Coffee might take a hit,'' he added.


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