Farmgate prices of robusta coffee have soared to record highs, bringing cheers to growers who are in the midst of picking the widely grown variety in the country.

The rally is tracking the global price trend, which are at a high on dip in inventories in key consuming regions of Europe and the disruption in the supply chain due to the developments in the Red Sea region.

Prices of robusta cherry, the widely produced coffee in the country, is hovering at a record high of ₹7,150-7,500 per 50 kg bag at the farmgate in Karnataka, up by 62-63 per cent over the year-ago period. Similarly, robusta parchment is ruling in the range of ₹12,100-12,400 levels, up 36-37 per cent over the year-ago period. Arabica parchment prices are trending at ₹14,300-14,600 levels, marginally lower than same period last year, while arabica cherry prices are higher by about a tenth at ₹7,900-8,100 levels.

Production costs rise

“Prices are at a record high, but the production costs have also gone up. Growers are facing labour shortage to harvest their crop. The cost of harvesting has almost doubled due to the labour shortage issues,” said HT Mohan Kumar, President, Karnataka Growers Forum.

The coffee picking costs, which were around ₹3-4 per kg last year have moved up to ₹6-7 per kg this year due to labour shortage, he said. Further, the labour shortage is likely to aggravate as everyone will be harvesting around the same time, Kumar said.

Robustas account for over two-thirds of the total coffees of around 3.5 lakh tonnes produced in the country, while arabicas account for the rest.

May not be able to take full advantage

“Inventories are low with roasters and there’s good demand for nearby shipments for immediate delivery in February-March,” said Ramesh Rajah, President, Coffee Exporters Association. However, Indian exporters would not be able to take full advantage as arrivals are slow as growers are not selling their coffees anticipating higher prices, Rajah said.

The supply chain disruption due to the developments in the Red Sea region have also contributed to the coffee price rise as the shipments to Europe have been delayed by 10-15 days with vessels taking a detour and longer route. “Buyers are anxious. The shipping costs per container have gone up by $1,500-1,800 and the transit time has gone up from 30-35 days to 45-50 days,” Rajah said.

“The coffee market is on fire,” said Praveen Kumar Kolimarla of Agrani Coffee and Commodities, who sources the beans for exporters and roasters. Robusta prices are at a 29-year highs on supply chain issues and lower inventories in the consuming markets. The increased use of robustas in coffee blends by roasters in recent years to keep prices under check during the Covid and economic crisis continues. As a result, there is good demand for robustas coffees and roasters are buying on need basis, Kolimarla said.