The Hindu Business Line : Pre-blossom showers cheer up coffee growers

A MAJORITY of the coffee-growing areas have received good pre-blossom showers, but rampant white stem borer in arabica plants remains a source of worry for the growers.

"The pre-blossom showers have been good in stages. Nearly 80 per cent of growers are happy over the good showers," said Mr Bose Mandanna, former Vice-President of Coffee Board. Settings in the crop, especially after the flowers wither, are good.

Though no projections have been made on the coffee crop for the October 2005-September 2006 season, the coffee industry expects things to be a little better this time despite an "off-year".

"In May, farmers should go in for fertilisation and other related activities. We expect them to spend more on good management practices as the prices have been good this year," said Mr Mandanna.

The industry expects arabica to be around one lakh tonnes next year and robusta 1.8 lakh tonnes, compared to the Coffee Board's projections of 1.16 lakh tonnes of arabica and 1.75 lakh tonnes of robusta this year.

"This is just our expectation. This is an off-year and we have to take into account the white stem borer, which is still a problem in some of the estates," said industry sources.

The sources also said hopes were that the prices would be good for another year too. "Analysts and even the International Coffee Organisation have projected that the prices will be firm."

Prices for coffee, which had been flat until January, have increased on projections of the crop being hit in Brazil and Vietnam.

"On Thursday, Brazil is expected to come out with its final projection for the next crop. That should be the key to the prices as dry weather there is a cause for concern," the sources said.

The crop in the South American nation is expected to fall 17 per cent to 30.7-33 million 60-kg bags.

On the other hand, Vietnam's robusta crop is feared to be hit as rains in the key-growing province of Daklak are expected to be delayed by over two weeks.

"Even here, we need rains now and then after the good pre-blossom showers," the sources said.

Fears over Brazil and Vietnam crop have led to volatility in the global coffee market, with prices fluctuating wildly.

On Tuesday, Liffee July robusta was up 3.8 per cent at $1,035 (Rs 45,300) a tonne.

Last week, it had dipped below $1,000 (Rs 43,750) after having run up to $1,100 (Rs 48,200) last month.

In New York, July arabica was quoted at $2,530 (Rs 1.10 lakh) a tonne.

In India, arabica plantation A is quoted around $2,800 (Rs 1.22 lakh) a tonne and robusta cherry AB around $1,325 (Rs 58,000).

"Global prices had run up very fast that they also came down quickly. Some people have taken advantage of the prices and sold some of the produce. But many people are still holding to stocks since they were expecting prices to rise further," the sources said.

"Those who sold are now using the money to buy fertiliser and other inputs for the crop," they added.

Meanwhile, growers are awaiting the special package for coffee. "Pending the package, most of them are yet to pay back their dues to the banks," the sources said.

"The growers are expecting a cut in the interest rates and therefore, they are looking forward to the package. The package is being worked out by the Union Commerce Ministry in consultation with the Finance Ministry and the Reserve Bank of India (RBI)."

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Farm loan straitjacket loosened

Mixed trend in rubber prices

Pre-blossom showers cheer up coffee growers — White stem borer still a cause for worry

Losing flavour

NCDEX launches coffee futures