As the harvest of arabicas – the mild and premium coffee variety – progresses in the key growing regions of Kodagu and Chikamagalur, growers are seen facing a double whammy this year.
Not only the pickings are lower than initial expectations, the recent decline in global prices on account of improving crop prospects in Brazil is seen impacting growers’ realisations.
“The harvest is not as per our expectation. As it is the crop was not big; but midway through the harvest it looks the crop size will shrink further,” said N Bose Mandanna, a large grower from Suntikoppa in Kodagu, adding that harvesting could end by December-end.
Mandanna said the arabica crop could be lower by 20-30 per cent against initial estimates, impacted by the high incidence of white stem borer, berry droppings caused by excess rainfall and disease such as leaf rot and stalk rot among others. The Karnataka Planters Association recently pegged this year’s (2014-15) arabica crop at between 60,000 and 70,000 tonnes.
Coffee Board officials said that the arabica crop could be lower than the post-blossom estimate of 1.05 lakh tonnes, but refused to quantify. The Board is expected to come out with its post-monsoon estimates in the next few days.
Volatile pricesFurther, volatility in global prices is seen influencing domestic prices. Global prices for arabicas, which stood at $2.7 cents per pound about a month ago, are now hovering around $1.78 to $1.80. The farm gate price of arabicas has dropped to around ₹10,400 per 50-kg bag for Arabica parchment against ₹12,200-500 a few weeks ago, Mandanna said.
Even exporters feel that the arabica crop size could be marginally lower than the initial estimates. Ramesh Rajah, President of the Coffee Exporters Association, said as the crop is lower, exporters are hesitant to book orders though enquiries continue for Indian coffee.
“The order books are down by half over last year. I don't think exporters have sold as heavily as last year. Exports will pick up next quarter,” Rajah said.
“In the short-term, coffee does look negative,” Rajah said adding that the downward trend is largely in line with the bearish trend in other commodities.
In Tamil Nadu, the harvest of arabicas has just commenced. It has also been delayed by about a month due to the late blossom showers. In Andhra Pradesh, the Hudhud cyclone has impacted the coffee plantations in Araku Valley and the crop is likely to be lower by about 1,000 tonnes.
Coffee Board, in its post-blossom estimate, had pegged the 2014-15 crop at 3.44 lakh tonnes including 2.39 lakh tonnes of robustas.