Domestic/Coffee

Industry sources said, the upsurge is largely a fallout of the anticipation that the crop would be around 40 per cent less than the previous year. Last year, saw a record crop and hence the anticipation.

The average prices for Arabica were around Rs 58 while that of robusta is Rs 33-34, which is slightly higher than the same period, last year.

M H Ashraff, managing director of Tata Coffee, said lower production would pull up prices. However, the price scenario is pretty much the same across the world. There is oversupply in the coffee producing countries which is resulting in a crash in prices.

Sources said, in the domestic many estates are up for sale, but there are no takers. The only remedy is to become more competitive, by focusing on improving the quality of production and reducing cost.

Around 60 per cent of the cost of production is on account of labour. “As per the Plantation Act, there are certain facilities, which have to be given to the workers.”

The industry apparently has made several presentations to the government. According to the industry, a part of the social cost should be borne by the government.