Arabica parchment coffee rules at 6-year high; prices scale ₹10,500 per bag

Price of Arabica coffees, mainly the premium parchment variety, have exceeded ₹10,500 per 50-kg bag, after almost six years providing relief to some extent to the growers, who are in the midst of harvesting the 2020-21 crop.

However, growers continue to face challenges such as bad weather and labour shortage impeding harvest in the key producing areas of Karnataka, which accounts for over two-thirds of the coffee produced in the country.

“Arabica prices are ruling around ₹10,500 per bag, but the big challenge is the shortage of labour that is delaying the pickings,” said S Appadurai, Chairman, Karnataka Planters’ Association.

Labour crunch, high costs

Coffee growers depend mainly on migrant labourers from North Karnataka and other regions as far as Bihar and Assam among others for harvesting their produce. The lack of direct trains from the North-East, which were cancelled due to Covid lockdown and elections have impacted the labour movement. Also, the panchayat elections in the State, scheduled later this month, has impacted the migrant labour arrivals in the region.

“The shortage of labour has already resulted in an increase in wage costs by about 10 per cent. Besides, the shortage has also resulted in delay in picking of ripe beans, which have split due to rains in some areas, thereby affecting the quality,” said N Bose Mandanna, a large grower at Suntikoppa in Kodagu.

Mandanna said the Arabica Parchment prices have hit this mark after a long time, but the overall cost of production is going up by leaps and bounds. “Earlier, we used to budget an annual increase of 5-7 per cent, but now it is 20 per cent. It is difficult to manage and meet both ends unless we get a price like this. Unless we get about eight bags of parchment per acre, we are not able to meet the costs.” Also, the labour shortage is seen affecting the quality of the Arabica produce this year as growers are not keen on taking multiple rounds of harvest.

Arabica cherry to go up

“Production of Arabica Cherry variety will go up by about 10 per cent this year,” Appadurai said. About 75-80 per cent of the arabicas produced in the country are converted as parchment after pulping and washing the beans. The washed coffees, considered as milds, command a premium and bulk of the produce is exported.

Ramesh Rajah, President of the Coffee Exporters Association, attributed the higher price to the delay in harvest of the arabicas. There could be some softening, once arrivals pick up in January, he said.

India’s coffee crop for 2020-21 season is seen rebounding from a decade low of 2.98 lakh tonnes (lt) in 2019-20. Broader consensus among the trade and growers is that arabica output could range between 80,000 and 85,000 tonnes, while robusta is expected to be between 2.30 and 2.40 lt. The Coffee Board, in its post-monsoon estimates, has pegged arabica output at 1.02 lt (87,000 tonnes) and robusta at 2.40 lt (2.11 lt).