Nepalese farmers tap into global thirst for coffee
The Guardain: Compared with the Bric countries and Next 11, Nepal is small fry. But that doesn't mean it can't have its own micro-boom. Bhimsen Giri is a coffee exporter with a problem. The farmers he visits in the hills around his native Kavre district, 20 miles outside the Nepalese capital, Kathmandu, are not producing enough. "We have hardly met 10% of the demand," said Giri.
However, the 30-year-old, who has been in the business for a decade, is optimistic. More Nepalese growers are turning to coffee, drawn by record prices paid by exporters.
"Farmers are very excited about coffee farming," Giri said. "But most of them lack information regarding the process and benefit of coffee farming."
Driven by surging demand – especially in traditionally tea-drinking countries such as India and Pakistan – the Nepalese coffee farming industry is booming. The result is visible on the neat rows of bushes on the green slopes of Kavre district. Nepal now has 1,700 hectares of coffee plantation, more than 10 times the area 20 years ago when growing started. Total production is 417 tonnes of coffee, more than 30 times the crop in the early 1990s.
In Kavre alone 2,200 farmers are involved in coffee, according to Hom Raj Giri, chairman of the Kavre District Coffee Entrepreneurs Association.
Every year, according to Prem Acharya, planning officer at the National Tea and Coffee Development Board (NTCDB), 16% more land is being used for coffee and production is increasing by 20%. The industry now employs more than 25,000 people.
In a country with deep poverty and political instability, coffee is one of the few industries beyond tourism that are thriving.
Binod Acharya, a technical officer at the NTCDB, said farmers were attracted to coffee as it was more profitable and less arduous to grow than traditional crops such as maize and millet.
"Maize, millet and coffee are all grown in steep, hilly areas but coffee production earns more than other crops," he added . "Neither heavy rain or dry weather make any difference to coffee plants, but cause problems for maize and millet."
One advantage for Nepal, still a minor player in the global coffee market but one with big ambitions, is the very hills that make farming so many other crops so hard.
"Nepal's coffee is regarded as speciality coffee in the international market due to [the] climate and typography," said Binod.More than 60% of Nepalese coffee is exported to South Korea, Japan, the UK, the US and other Asian and European countries. Even in the recession-hit west, coffee consumption has risen in recent years.Andrea Illy, chairman and CEO of Italian coffee group illycaffe, recently said coffee consumption was likely to grow globally by between 2% and 3% over the next decade, as it has done over the past decade.
Globalisation and rising incomes, combined with marketing drives, would propel coffee drinking in countries such as China and India where coffee is not part of traditional culture, he said. Both countries are neighbours of Nepal.
Illy said he believed that "in one generation, China will become one of the five most important coffee-consuming nations in the world" while in India, the world's second most populous country after China, consumption was rising as promotional campaigns gathered momentum and incomes rose.
India, which like China shares trade links with Nepal, has a long tradition of coffee houses and coffee growing. Although an average American drinks 40 times more coffee a year than an Indian, local demand has reportedly doubled in the last decade as levels of affluence have risen and a cafe culture has grown. Starbucks recently opened its first branch in Mumbai. Queues were so long there were reports of traditional chai sellers serving those waiting in line.
The taste for cappuccino or latte in Shanghai and Hyderabad – as well as further afield – is generating much-needed foreign reserves for the Nepali government and income in agricultural communities with few resources.
In Nepal, too, demand is growing fast. Madan Sapkota, Bbusiness development manager at Himalayan Beanz, a coffee house in Kathmandu, said business was thriving.
"Three years back we launched with two outlets in Kathmandu. Now we have six and by the end of this year we are planning to launch five more," said Sapkota, who sources his coffee from Nuwakot district, 30 miles outside the capital. "Demand for coffee is not just booming in the international market but in the domestic market as well."