Agri Business

Arabica parchment hits record ₹15,000 per bag

Vishwanath Kulkarni | | Updated on: Nov 30, 2021
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Growers fear that concerns over the spread of Omicron could limit their gains

Farmgate prices of arabica parchment are hovering at record levels of around ₹15,000 per 50-kg bag tracking a global uptrend in coffee prices after bad weather hit supplies from Brazil.

However, growers fear that concerns over the spread of Omicron could limit their gains. Besides, prolonged cloudy weather has delayed the drying process, adding to the production costs.

Arabica parchment prices in Karnataka are higher by around 50 per cent against ₹10,000 per bag during the same period a year ago. Similarly, arabica cherry prices are up by 70 per cent at around ₹6,000-6,400 compared with ₹3,500-3,700 in the year-ago period.

“In rupee terms, this is the highest price. We haven’t seen such prices,” said Bose Mandanna, an arabica grower in Kodagu. The October-November rains have hit the harvest, which has resulted in higher production costs for the growers, Mandanna said.

Monsoon impact

The extended monsoon this year has hit the arabica crop badly and losses are estimated at around 30 per cent of the crop over last year’s 99,000 tonnes.

The USDA India Post in its recent estimate pegged the 2021-22 arabica crop lower at 76,800 tonnes. Unseasonal rains in November are expected to impact arabica crop yields by 2 per cent and delay the harvest by at least two weeks, USDA said.

“It is a record price. This is for the first time we are seeing this price,” said B S Jayaram, an arabica grower in Mudigere, Chikmagalur. “Now, prices are good for arabica but we don’t have a good crop this year. There is around a 30 per cent decline in crop this year due to the heavy rains and berry droppings,” he said.

Some traders are buying good quality arabica parchment at ₹15,000-16,000 per bag, but are strict on quality parameters. The Arabica parchment purchase price at Coffee Marketing Co-operative (Comark), which stood at ₹14,900 on Sunday and was down ₹14,600 on Monday, November 30. Jayaram attributed the decline in price on Monday was due to the concerns over the spread of Omicron.

Tough process

“Growers have been trying to dry their coffees over the past 30 days. Small growers who don’t have dryers or poly houses have faced difficulty in drying their produce. Coffee drying is a labour-intensive process and the prevailing weather has pushed up the expenditure. With good sunshine, coffee can be dried within seven days. Now it’s over a month now, but growers are still struggling to dry their coffees. Harvesting and drying cost which used to be around ₹2,000-3,000 has now gone up to ₹7,000-8,000 per bag,” Jayaram said.

“Arrivals are slow and prices are firming. There’s some aggressive buying by some exporters at the beginning of the year. Overall, we expect arabica prices to remain firm,” said Ramesh Rajah, President, Coffee Exporters Association.

Rajah said rains have delayed the harvest by about three weeks, while some growers could be holding back the produce. On the threat posed by Omicron to Indian coffee shipments, Rajah said it is too early to comment on the impact. “Shipments are slow due to the slow arrivals and are expected to pick up from January,” he said.

Published on November 30, 2021

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