Local coffee price climbs to new high

Coffee prices in the domestic markets touched an all-time high on Wednesday tracking global markets, and were likely to have an effect on domestic coffee consumption pattern, especially in North India, traders and growers said.

Prices of arabica coffee rose to Rs 244 a kg at the Indian Coffee Trade Association auction in Bangalore from Rs 240 on Monday. Prices were likely to rise further mainly on supply concerns in international and domestic markets, they said.

Traders say this is a record price for this variety, which is used in coffee blend for consumption in domestic markets.

“After arabica plantation coffee is blended (with robusta), prices go up to Rs 350 a kg, when supplied to coffee traders in North India. Traders there are not ready to make any purchase at this level,” P Sureshbabu, proprietor of Bangalore-based Chaitanya Coffee said.

Raw arabica parchment in the domestic market was trading at Rs 9,200 per 50 kg, up from nearly Rs 7,900 a month ago. Similarly, raw arabica cherry was trading at Rs 4,750 a 50 kg, up from around Rs 3,800 last month, traders said.

“Coffee growers are holding back arabica stocks on hopes it may touch Rs 10,000 per 50 kg,” Sureshbabu said.

Traders also fear rising prices may bring domestic coffee consumption down, especially in North India, a market that is seen driving up demand in the days to come. People in this region have traditionally preferred tea over coffee, but are now taking up coffee in increasing quantity.

He said, “Domestic coffee consumption pattern, especially in the growing North India market, may take a hit due to the record rise in prices.”

Traders blamed growers for stocking their produce on expectation that prices may firm up further.