Agri Business

Rising prices bring cheer to coffee growers

Vishwanath Kulkarni Bengaluru | Updated on January 12, 2018 Published on January 18, 2017

A projected drop in Brazilian coffee output and tight supplies from other growing regions is seen bringing cheers to the Indian growers as prices of the bean have been on an upward trend over the past few weeks. As a result, growers are seen holding back their produce on expectations that prices were likely to move up further.

Farm gate prices in India, tracking the New York and London terminals, have moved up by at least a tenth since early December on tight supplies. Arabica parchment prices are now being quoted around ₹9,400 per 50 kg bag as against the ₹8,100 levels in early December.

Similarly, the Robusta parchment has also moved up to around ₹7,000 levels and robusta cherry prices are hovering around ₹4,000 per bag levels, growers said. Compared to last year, the prices of both the varieties are up by around ₹1,000 per 50 kg bag this year, trade sources said.

Conab, the Brazilian government agency, forecast on Tuesday that the coffee output in the world’s largest producer and exporter of the bean would drop as much as 15 per cent in 2017 over last year’s record output of 51.4 million bags. Conab has pegged Brazil’s 2017 output at between 43.7 million and 47.5 million bags of 60 kg.

“Prices are moving up and are higher by about ₹1,000 per 50 kg bag over last year. But the arabica crop size is lower than last year and there’s hardly any coffee that’s coming into the market,” said DM Purnesh of Classic Synergy, that has estates in Sakleshpur and Chikmagalur. Purnesh further said that the prices have been volatile in the recent months and that it was difficult to predict where they are headed.

The Coffee Board has predicted arabica cropsize of 96,200 tonnes, about 7 per cent lower than last year’s 1.035 lakh tonnes. Robusta output is pegged around 10 per cent lower at 2.205 lakh tonnes from last year’s 2.445 lakh tonnes. The total output is expected to drop nine per cent at 3.16 lakh tonnes from last year’s record of 3.48 lakh tonnes.

In Kodagu, the country’s largest coffee producing district, harvesting of Arabica is almost over in more than half the area under the premium bean variety. “The crop size is looking better than we had initially thought. Rains across the region in October-November has helped the beans gain size,” said Bose Mandanna, a large grower in Suntikoppa, near Madikeri. He expects the arabica output could increase by about a tenth than the earlier estimates. The Board has predicted arabica crop of 17,400 tonnes for the current year lower than last year’s 19,150 tonnes. The harvest of robusta harvest is expected to begin in few weeks as the cold weather in seen delaying the ripening of beans.

Trade sources said growers are holding back their produce in anticipation that prices would move up further on tight global supplies. “At the same time the orders from overseas buyers are thin. There are no big deals happening,” an official at a multinational trading house said.

Published on January 18, 2017
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