Robusta parchment production likely to decline 28%

The domestic production of robusta parchment coffee may decline 28 per cent to 20,000-25,000 tonnes this year. Last year, the production was 35,000 tonnes.

This is due to last year’s glut, which pulled down the premium in the international market.

“In 2009, the premium on robusta parchment was $600-800 a tonne (Rs 35-40 a kg) over the price of robusta cherry in the London market, due to low production. So, many planters shifted to robusta parchment, producing around 35,000 tonnes, which created a glut and led to a significant fall in the premium to around $200 (Rs 10 a kg). As a result, we expect a reasonable production level of 25,000 tonnes in 2011,” said Sahadev Balakrishna, chairman of the Karnataka Planters’ Association.

India is the market leader in the robusta parchment variety. It is used by Italian and other quality-conscious European roasters to prepare ‘espresso’ and ‘capuccino’ coffees. Due to this, it commands a premium over the London robusta terminal price.

“Though there is no provisional estimate for robusta parchment production for 2011, we feel it will be in the range of 20,000-25,000 tonnes,” said Jawaid Akhtar, chairman of the Coffee Board of India. He, however, said the premium would be determined by availability and demand in the international market.

According to a Coffee Board estimate, India produced around 18,000 tonnes robusta parchment in 2009 and around 35,000 tonnes in 2010, out which 32,500 tonnes were exported. “The market balances itself at the time of glut and deficit. Robusta parchment production is expected to follow this rule,” Akhtar added.

Ramesh Rajah, president of the Coffee Exporters’ Association, said production would be normal. “Premiums may not reach the 2008-level of $1,000 a tonne. They are expected to be around $500 a tonne,” he said.

He said the glut was a cyclical phenomenon that happened every five to six years. About exports, he said crops were yet to arrive in the market. “The demand seems for this variety seems to be robust from Italy and other European nations,” he added.