A sharp fall in the rupee has increased exporters’ interest in coffee, causing an unusual increase in prices in recent days at major markets in South India. This has also created a shortage in the domestic market. Robusta coffee output is estimated to be 8.5 per cent lower this year.
Prices of robusta cherry (naturally dried beans) have gone up 25 per cent since December-January and are currently at Rs 3,250 a bag (each bag = 50 kg). The variety was traded at Rs 2,600 a bag in December-January.
Robusta parchment (washed coffee beans) is up 23 per cent to Rs 6,800 a bag, against Rs 5,500 a bag in January. Robusta parchment is in demand from exporters, who are looking to book profits due to the depreciating rupee.
“This year, we have seen a decline in the production of robusta, as the crop did not get sufficient rain last year. Also, there is huge demand from exporters, as 95 per cent of robusta parchment produced in India is exported. Already, in the past five months, we have seen export of 12,336 tonnes as against the production of about 25,000 tonnes annually,” said Marvin Rodrigues, chairman, Karnataka Planters’ Association (KPA).
For 2011-12, KPA estimates the production of robusta at 190,000 tonnes, a drop of 8.5 per cent over 2010-11, when it was 207,860 tonnes. However, the Coffee Board is yet to announce official harvest data for the year.
“Robusta is largely grown by small and medium growers. As the crop is short this year, growers are holding on to their stocks in anticipation of much higher prices at a later stage. The shortage would be more visible by September-October,” said Ramesh Rajah, president, Coffee Exporters’ Association of India.
According to him, the surge in the prices of coffee in Indian markets was way above that of international prices. Robusta prices have increased 11 per cent in the international markets to touch $2,100 a tonne in May, compared to $1,900 a tonne in February. However, compared to December levels, the prices are lower by 12.5 per cent.
However, prices of arabica parchment are still lower by 21.4 per cent at Rs 8,250 a bag, compared to Rs 10,500 in January. “The drop in arabica prices could be attributed to a bumper crop in Brazil, which has started coming to the market. The Indian crop for the year 2011-12 is also higher by about 10 per cent,” Rajah added. The Coffee Board has pegged post-monsoon arabica production at 103,725 tonnes, compared to 94,000 tonnes last year.