March 15, 2023

Will Nepal produce more specialty coffee in the future?


Nepal is a small landlocked country in South Asia, which sits between India and Tibet. The country’s landscape is incredibly diverse, and is home to eight of the world’s ten largest mountains, including Mount Everest – the highest point on earth.

Primarily a tea-growing and drinking nation, coffee production is still relatively new to Nepal. According to the Nepalese government’s National Tea and Coffee Development Board (NTCDB), it was only between the 1980s and 1990s that coffee was grown on a commercial scale in the country.

The NTCDB reports that in the 2021/22 harvest season, Nepal produced 354.9 tonnes of coffee. While this is a decline from the record 530 tonnes produced in 2018/19, production volumes have been increasing in recent years.

The country grows high-quality arabica – and there is clear potential that specialty coffee production could increase, too.

Bhavi Patel is a dairy technologist and food and travel writer, who has been writing extensively about the global coffee industry for some years now.

In this article, she explores the Nepalese coffee sector, the challenges that local farmers face, and whether the country can grow more specialty coffee. 

You may also like our article on micro lots & Monsoon Malabar: India’s future as a coffee origin.

Red coffee cherries on a branch.

When was coffee introduced to Nepal?

Similar to India and other producing countries, coffee is not native to Nepal. It’s believed that in 1938, nomadic hermit Hira Giri brought coffee seeds from Burma (now known as Myanmar) back to Nepal.

Hira Giri is said to have planted the seeds in Aapchaur – a hill village in the Gulmi District. However, it took another thirty years for coffee production to start increasing in the country when the Nepalese government imported coffee seeds from India in 1968. 

Throughout the following decade, small-scale coffee production spread to other regions of Nepal, including Palpa, Syangja, Kaski, and Baglung.

Commercial coffee production in Nepal

By the mid-1980s, however, farmers started to grow coffee on a commercial scale. Between 1983 and 1984, the Nepal Coffee Company (NeCCo) was established in Manigram in the Rupandehi district. This meant local farmers could collectively process and dry mill their coffees for export, which helped to boost production volumes.

Throughout the 1990s and early 2000s, more and more farmers started to grow coffee. In response, Nepal’s Ministry of Agriculture launched the Coffee Development Programme, which provided technical and financial support to local producers.

Today, the International Coffee Organisation estimates that across 42 districts in the country, there are over 32,500 households involved in coffee production. Moreover, research from Specialty Coffee Nepal, a non-profit organisation which promotes Nepalese specialty coffee culture, says that some 45% of coffee farmers are women. 

The Kavrepalanchok district in eastern Nepal is the largest coffee-producing region in the country – spanning 273ha and producing more than 32 tonnes of coffee. The second-largest coffee-growing district is the Gulmi district in western Nepal, which spans 231ha and produces 27 tonnes of coffee.

Common varieties and processing techniques

Nepal’s climate and landscape make it ideal for growing arabica – mostly because of its high altitudes. In fact, many industry professionals say only arabica grows in Nepal.

Surya Dura is the founder and Managing Director at Lake City Coffee in Pokhara, Nepal.

“About 80% of the coffee produced in Nepal can be categorised as specialty-grade coffee,” he says. “In the 2022/23 harvest season, coffee production is expected to increase to about 400 tonnes.”

The most common varieties found in Nepal are Bourbon, Pacamara, Typica, Caturra, and Catimor – certainly an indication of high-quality coffee.

Most farmers use washed processing methods, however, more producers are experimenting with natural and honey processing techniques. In recent years, anaerobic natural fermentation has started to become more popular, too.

Generally speaking, Nepalese coffee has unique floral and chocolate flavour notes, with some distinct nuttier flavours. The biggest importers of the country’s coffee are Germany, Japan, the US, South Korea, and the Netherlands.

A woman drinks coffee from a street vendor in Nepal.

How do people drink coffee in Nepal?

Historically, Nepal is a tea-drinking country. However, coffee consumption has been steadily growing for some years.

“Nepalese baristas working in other countries help to promote homegrown coffee,” says a representative from Specialty Coffee Nepal. “More and more coffee events are also happening in the country, which also helps to bring people from across the value chain together, as well as drawing more attention to Nepalese coffee.”

In line with this, there are more specialty coffee roasters, coffee shops, and education facilities opening in Nepal. A representative from Specialty Coffee Nepal tells me that some of the most notable specialty coffee roasters in the country include Mount Brew Coffee, Nya No Specialty Coffee, Brewshala Coffee, and many more.

Deepak Paudel is a renowned coffee professional in Nepal. He is also the founder of the Pokhara Coffee Roastery.

“Because it is often easier and quicker to learn barista skills than any other profession in the coffee industry, more and more younger people show interest in the position,” he says. “Some of them are also moving to other countries to broaden their skills so they can return to Nepal after a few years and potentially open their own coffee shops.”

Deepak adds that many Nepalese baristas work in Middle Eastern countries or in Australia, where specialty coffee culture is particularly popular.

As in many other countries, milk-based drinks – such as cappuccinos and lattes – are popular among consumers in Nepal.

However, in recent years, more and more Nepalese coffee shops are using manual pour over brewers. As part of this, we’re seeing more baristas push to get formal training to improve coffee quality, as well as roasters offering classes and educational courses.

Furthermore, coffee consumers in the country are also showing more interest in preparing café-quality drinks at home – with some taking part in coffee workshops. Companies like Brewing House distribute and supply equipment to coffee businesses and consumers alike.

A Nepalese coffee producer inspects green coffee cherries.

Challenges in the Nepalese coffee sector

Although figures indicate a steady increase in Nepal’s coffee production volumes in the coming years, farmers in the country still face a number of challenges.

As with many other producing countries, Nepalese coffee farmers are dealing with the effects of climate change and a shortage of workers.

Global warming poses several concerning issues for Nepal’s coffee sector. For instance, unpredictable rainfall and frost often damage cherries and blossoms on branches, which can heavily affect quality and yields.

Moreover, the impact of climate change also increases coffee plants’ vulnerabilities to pests and diseases – in particular the white stem borer (Xylotrechus quadripes). 

The Gulmi district underwent a white stem borer epidemic in 2016, which severely affected coffee producers in the region. In some cases, farmers in Nepal have reported up to 60% loss in annual yields because of the insect, which lays its eggs in the branches of coffee plants. Eventually, the plant stops producing cherries and dies.

Even more concerning are the long term effects of climate change on Nepal. Research from Kunming University suggests that Nepal will see a significant shift in its agroclimatic zones over the next few decades. In turn, this could result in up to 72% of the country’s coffee-growing areas becoming unsuitable by 2050.

Labour issues

Many origin countries are currently experiencing labour shortages in their agricultural sectors, including for coffee.

The representative from Specialty Coffee Nepal explains that in Nepal, there are three major reasons for labour issues:

  • Low wages
  • Lack of formal training and education for farming best practices
  • Waning interest in working in agriculture

“Another issue in the Nepalese coffee sector is workers moving to other countries for employment,” Surya says. 

Fluctuations in market prices also lead to further difficulties, which is why some farmers choose to join co-operatives. Co-ops provide a number of benefits to their members, including improving access to several markets, formal training programmes, and farming inputs.

Tulasi Raj Dhital is the founder and chairman at the Central Coffee Co-operative Union Ltd. (CCCU) in Kathmandu, Nepal. 

“The prices that farmers receive for cherry and parchment coffee are fixed by the NTCDB in coordination with other stakeholders, including co-operatives,” he explains. “This means that members know beforehand what they will be paid.

“This helps to ensure co-operative members get a fair price for their coffee,” he adds. “We also help producers understand new farming techniques that help to improve yields and plant health.”

Green coffee cherries growing on a plant.

How could the Nepalese coffee sector grow over the next decade?

Ultimately, if coffee production is to become more sustainable in Nepal, farmers need to know how to adapt to the effects of climate change by implementing more climate-smart agricultural practices. Intercropping coffee with other plants, such as bananas, could also be beneficial as they can provide much-needed shade cover.

“If we could plant more coffee using proper farming techniques, as well as planting new varieties, then Nepalese coffee production could grow on a much larger scale in the next decade,” Surya explains. “Improving knowledge, planting a wider range of varieties, and encouraging more young people to take part in coffee production are the three main ways we can grow the country’s specialty coffee sector.

“Specialty coffee production has just started in Nepal, and it’s still yet to gain a big market, but it could happen soon – Nepalese coffee has a lot of potential,” he adds.

The representative from Specialty Coffee Nepal tells me that measures to provide more formal training are already underway.

“Some agricultural institutions in the country have already started including a coffee-focused syllabus as part of their curriculum,” they say. “Farmers need to have proper training, as well as more awareness about planting, harvesting, and processing coffee in the best possible ways.”

Tulasi believes that the country’s government also needs to provide more support to coffee farmers.

“Strengthening and improving logistical and transport facilities would be immensely helpful to coffee farmers,” he tells me.

What about driving consumption?

When it comes to education, Deepak says that it also plays a key role. He explains that he is working hard to attract the attention of the Specialty Coffee Association, which he believes would help baristas and roasters, as well as coffee farmers, to gain better access to different training programmes and events.

In terms of coffee competitions, Deepak believes that Nepal could one day host its own National Barista Championship or AeroPress Championship.

“Nepal already has national champions, but they’re representing other countries,” he tells me. “There are many local coffee competitions taking place, so it shouldn’t be too long before we reach the world stage.”

Starbucks sign in Lukla, Nepal.

It’s safe to say that there’s plenty of potential for Nepal to scale its coffee production. And with more people drinking specialty coffee than ever, the future certainly looks promising.

However, at the same time, it’s also clear that for both production and consumption to grow sustainably, Nepal’s coffee sector needs more support – especially when it comes to adapting to climate change.

Enjoyed this? Then read our article on the white stem borer: a threat to the Nepalese coffee industry?

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