San Jose, Costa Rica, Nov 17 - India will see a sharp rise in per capita coffee consumption in coming years and may need to import quality Arabica coffees, the head of one of the country's largest coffee firms said on Friday.
India, a major coffee producer, has traditionally been a tea drinking nation but a growing middle class has increased the popularity of coffee shops.
"You'll run out of coffee in India in the next four years because consumption is growing so fast and people are willing to pay for quality," said V.G. Siddhartha, who heads the Coffee Day group.
The company grows, exports and roasts Indian coffee though the Amalgamated Bean Coffee Trading Company and runs coffee shops throughout the country under the Coffee Day brand.
"India will be an importer of high grade coffee in a matter of five years," Siddhartha told an annual conference of coffee executives in Costa Rica.
India grows about 4.7 million 60-kg bags of coffee a year, mostly lower quality robusta beans used in soluble coffees.
Demand domestically for higher quality arabicas is around 1.2 million bags and rising, Siddhartha said.
The country should lower tariffs on green coffee to allow for more arabica imports or risk facing a shortage, he said.
Farmers, instead of planing more arabicas, are using the little available land in the country to grow robusta trees, seen as easier and less costly to grow, he said.
"I don't think Indian production will go up at all, maybe I think Arabica production will come down a little before stabilizing," he said, creating a potential market for growers in Central America who focus on high altitude arabicas.
Coffee consumption in India is about 85 grams of coffee per person per year, Siddhartha said, a fraction of the around 10 kilograms per year consumed by people in Nordic countries.
But he said per capita consumption in India should rise to 1 kilogram per year over the next 15 years.
To take advantage of this growth, his company wants to expand to over 2,000 coffee shops in four years, up from the 750 operating now, and open more small-scale coffee kiosks.
Company-built vending machines have helped boost sales since their introduction last year.
"India and China ... constitute 40 percent of the world's population and we are the only ones who are growing," he said.
"There will be great opportunities for growers here (in Central America) to develop relationships," Siddhartha said.
The Indian economy is facing a slowdown in the next 12 to 18 months but growth is likely to recover over the next five years, making India a lucrative emerging market for the global coffee trade, he said.