Farmgate prices of robusta coffees, the widely grown variety in the country, have declined by about a third over the past three months, tracking global price trends. Prices of robusta cherry, which hovered above ₹12,200-13,200 a 50-kg bag during the last week of March, have now come down to the levels of ₹9,400-10,300, as per the Coffee Board data.
Similarly, the price of robusta parchment has declined to ₹16,700-17,000 per 50-kg bag from around ₹22,200-22,900 levels in late March. However, the decline in arabica coffee price has not been as steep as robustas. Arabica parchment has dipped to ₹25,200-26,000 from the highs of ₹26,500-27000 levels in late March. Similarly, arabica cherry is currently hovering around ₹13500-14200 levels from the late-March levels of ₹15200-17000 per 50 kg bag.
Rue lost opportunity
H T Mohan Kumar, immediate past president, Karnataka Growers Federation (KGF) and member of the private sector consultative board of International Coffee Organisation, said the domestic prices have come down from a peak level of over ₹13000 per 50 kg bag to around ₹9000 levels following the global trend.
“Many growers are still holding on to their crops. When the prices had hit peak levels during March-April, they were waiting for the prices to go up further, but now the prices have come down. Many are lamenting that they could not encash their produce during the rally. Now they are waiting for the prices to go up again to sell their produce,” Mohan Kumar said. “Even the current prices are at satisfactory levels, when compared to the last year,” he added.
Pramod Somiah, a coffee curer in Gonikoppa, said – “Prices have come down by about a third. Earlier, the view was Brazil crop was bad, but now it is not bad as it was perceived to be. So, prices declined. A clearer picture will emerge in a month’s time when the Brazilian harvest is complete. People have been selling in phases on a need basis. Even at these levels, people have been selling to meet their cash flow requirements”.
Weather impact
Coffee prices have been on an uptrend over the past couple of years on tight global supplies, which have been impacted by erratic weather in the key producing countries of Brazil and Vietnam among others. However, in the past three months, the prices have retraced from their peak levels.
In its latest report, RaboResearch said coffee prices have witnessed a sharp decline in the past three months, with arabica prices dropping by 17 per cent and robusta prices by 30 per cent. “This downturn is attributed to improved production forecasts and diminishing demand in key markets such as Brazil, Ethiopia and Germany. Despite the recent price reductions, global coffee demand is projected to decrease by 0.5 per cent in 2025,” it said.
Carlos Mera, Head of Agri Commodities Markets at RaboResearch, said global coffee production is expected to reach 169.7 million bags in 2024-25, with a preliminary forecast of 171.1 million bags for 2025-26. While Brazil’s exports from the 2024 harvest have slowed, robusta production in the current harvest remains strong. Colombian production is strong at 14 million bags for 2024/25, though a decline is anticipated next season due to excessive rainfall. Ethiopia’s exports have surged by 66% to 7 million bags, driven by high prices, favorable production conditions, and a decline in domestic demand.
A neutral balance sheet is expected for 2024-25, with a minor arabica deficit and robusta surplus. A surplus of 1.4 million bags is projected for 2025-26, primarily in arabicas. A much larger surplus is likely in 2026-27, especially if weather in Brazil is more or less normal. This underpins our bearish price forecast, with an average of USc 300/lb anticipated in Q4 2025, RaboResearch said.