INSTITUTE OF MANAGEMENT STUDIES,

GHAZIABAD

DISSERTATION

INDIAN COFFEE SECTOR AMID COVID-19

PANDEMIC

ECONOMIC ANALYSIS OF INDIAN COFFEE SECTOR IMPACTED BY

COVID-19 PANDEMIC

by
VAISHNAVI SINHA- BM022325
Dr. Amit Bhati, Dissertation Supervisor
OBJECTIVE AND RELEVANCE
The relevance of exploring the impact of COVID-19 on the coffee sector lies in its potential to
inform strategies for industry recovery and resilience. Understanding the long-term economic
consequences is crucial for stakeholders to make informed decisions. Analyzing resilience
strategies can provide valuable insights for businesses and policymakers to better navigate future
crises. Additionally, investigating shifts in consumer behavior ensures a comprehensive
understanding of market dynamics, aiding in the development of strategies that align with
evolving consumer preferences. Overall, the topic's relevance extends to practical implications
for the coffee industry's sustainability and adaptability in the face of global challenges.

THE PROBLEM STATEMENT

Within only a few weeks, the spread of the novel coronavirus (covid-19) developed into a global
public health crisis, with more than 180 countries and regions affected.
In my dissertation synopsis, I aim to delve into the multifaceted impact of COVID-19 on the
coffee industry in India. This research is imperative given the dynamic nature of the pandemic's
effects on various sectors. The study will explore the disruptions in the supply chain, initial
declines in production, and the subsequent adaptation strategies employed by key players in the
Indian coffee sector.
Moreover, the closure of cafes and restaurants during lockdowns has likely reshaped consumer
behavior, impacting the demand for coffee. Analyzing these shifts, along with the potential rise
in at-home consumption, will provide a comprehensive understanding of how the pandemic has
influenced coffee consumption patterns in India.
This research is not only academically relevant but also holds practical significance for industry
stakeholders and policymakers. It will contribute valuable insights that can guide strategic
decisions, fostering resilience within the Indian coffee sector in the face of unforeseen
challenges.The historical tests and projection simulations were an iterative process. In the final
iteration the model performed well and solved to a reasonable solution.

LITERATURE REVIEW

There has been an abundance of literature and research concerning coffee and the coffee sector.
The scope of the literature has addressed various points of interest ranging from price
differentiation of different botanical coffee varieties to implications of policy from International
Coffee Agreements and including many topics in between.
This study organizes the literature review to focus on selected theoretical and empirical studies
whose objectives, methods of analysis, specifications, elasticities and/or conclusions may help
address the structural behavior of supply, demand, policy and price in the analysis of the
international coffee industry.

Marc Nerlove in an article from the Journal of Farm Economics from 1956 provided an
introductory framework for addressing acreage elasticities through the concept of a partial
adjustment model for agricultural commodities. This concept has been used to assist in the
quantification of the response of supply to price. Nerlove’s perspective that producers will
partially adjust to where their ideal position would be provides an 45 appealing point of view and
seems realistic. "In general, more recent prices are a partial result of forces expected to continue
to operate in the near future: the more recent the past price, the more it expresses the operation of
those forces relevant to expectation" (Nerlove, 1956, p. 499). This basic premise provides a
framework that introduced the lagged dependent variable into the supply specification allowing
for the ability to derive long range elasticities. An interesting point is that the concept of lagged
dependent variables has also been extended into stock behavior as well, which will be discussed
later. In this thesis, Nerlove's partial adjustment model was considered in combination with other
supply function work that was extended for perennial crops and also specifically for the coffee
sector by other authors

RESEARCH GAP
The research gap in my dissertation synopsis revolves around the need for an in-depth
investigation into the long-term economic repercussions of COVID-19 on the coffee sector.
Existing literature lacks a comprehensive understanding of the resilience strategies implemented
by various stakeholders within the industry to navigate the challenges posed by the pandemic.
Furthermore, there is a notable gap in exploring the nuanced shifts in consumer behavior related
to coffee consumption during and after the pandemic. Filling these gaps will contribute
significantly to a more holistic and insightful analysis of the impact of COVID-19 on the coffee
sector.