Coffee Board Sets Up Panel To Calm Price Volatility

In an effort to stem the hike in coffee prices, the Coffee Board has formed a sub-committee to come up with recommendations to regulate the volatile domestic market.

Coffee Board chairman Philipose Matthai told Business Standard yesterday that ``we have set up a committee to discuss the price fluctuations in the market. We felt the price situation should not be viewed on an ad hoc basis. Its not a policy but the trade members need to take a long-term view about the coffee market.

The committee, to be chaired by Matthai, will comprise vice-chairman D M Putte Gowda; a leading roaster-cum-dealer, R P Sarathy; a coffee grower, Bose Mandanna; a consumer-member, K Balasubramanian; and two traders N G Ravindranath and Mudde Gowda.

 

The committee will submit its recommendations in two weeks. Its not an earth-shattering effort, Matthai, however, observed. This seems to be a view shared by the members of the trade.

Sceptical about any fall-out from the report to be submitted by the committee, coffee dealer R P Sarathy pointed out, the domestic coffee market right now is very volatile. The prices are being dictated by the New York and London markets. International speculators and fund operators have come into the market. We dont think anyone can stop the rising prices now.

The Rs 10 hike this month has jacked up the selling price of the Arabica plantation grade to Rs 200 per kg. From February this year, the cost of this blend has been steadily increasing from Rs 170 per kg by nearly Rs 10 per kg every month. However, the consumer has still largely not been affected by the hike since the dealers were hawking mixtures of the highly-priced Arabica and inferior quality blends in the market.

The continuous steep hike has been blamed on the rising international prices, the freeing of the former controlled market and the falling domestic demand.