Prices of arabica parchment, the premium variety coffee, hit a record high, breaching ₹20,000 mark per bag of 50 kg last week tracking global price trends. However, rains under the influence of Cyclone Fengel across the key producing regions of Kodagu, Chikamagaluru, Hassan and Shevaroys triggered concern among growers, who feel that it may impact the quality of the produce. The harvest of arabicas has been delayed by some 3-4 weeks this year on erratic weather pattern.
Arabica parchment prices hovered around ₹19,500-20,800 range on Monday, while the arabica cherry ruled at ₹11,500-12,000 levels. The robusta parchment prices are hovering around the ₹19,000-19,500 levels, while robusta cherry is ruling around ₹11,200-11,500 per 50 kg. Prices are higher by over a third over same period last year.
“Prices are at a record high. I feel that the prices will hover around these levels because fundamentally the crop loss is there. It can’t be produced tomorrow.” said Pramod Somiah, a coffee processor in Gonikoppa. “At these levels, there are not many buyers at present. It will take another 15 days to one month for buyers to come into the market,” he said.
Fears over impact
Growers have just started harvesting and it started raining now. “The rains at this stage are very bad because harvesting becomes a problem. Also, drying becomes a problem. So, it’s going to be difficult for the farmer and I really don’t know how many people will get benefit of this price rise,” said Somaiah.
“Prices are good for the growers, but we do not know to what extent these recent rains have had an impact on the crop,” said Ramesh Rajah, President, Coffee Exporters Association.
“Though buyers are enquiring, there is reluctance on selling now due to the uncertainties over the crop and when it is coming in and the pricing also is a problem. The arabica order book is a little thin and it is more a choice of exporters rather than the lack of demand. Generally, overall there is a demand for coffee because of the uncertainties in the world market. However, exporters are being cautious and reluctant to commit,” Rajah said.
With buyers in Europe, the main destination for Indian coffee, having covered up aggressively in the run up to the proposed EUDR norms, there’s a lull in the market, he said. “Compared to the volatility being witnessed in the market, growers prefer a stable price trend,” said M Salman Baseer, a large arabica grower in Hassan and vice-chairman of Karnataka Planters Association. Picking has just started and the rains triggered by cyclone are posing challenges in drying, which may hurt the quality. Also, the continued rains would lead to fruit split on the plants and dropping, leading to quality issues, he said.
Baseer said the increase in prices also leading to higher costs with the workers and labourers demanding an increase in wages.