It is a double whammy for India’s coffee growers-- - the production has significantly dropped and the prices are on a downward slide. But exports have gone up, that too, by 17 per cent in the past four months.
The Arabica production has been coming down for the past five years. From around 1.20 lakh tonnes, the output has dropped to 90,000 levels. The Robusta crop too is hit by a
bad crop year as production is expected to be around 2 lakh tonnes against 2.40 lakh tonnes last year.
As Ramesh Rajah, president, Coffee Exporters Association, puts it, the white stem borer attack has only grown from bad to worse with no proper solution in sight. The stem borer has been attacking the Arabica plants, leading to wilting and yellowing of the leaves and gradual destruction of the plant.
Topping it, the weather conditions last year were not conducive for both Arabica and Robusta. For a large part of the year, coffee-growing areas of Karnataka and Tamil Nadu
suffered a drought-like situation. Robusta, which usually does not get affected by the stem borer, had to bear the brunt of the weather.
Arabica parchment prices have dropped to Rs 6,500 per bag at the farm-gate level from Rs 8,000 a year go. Prices go by the international market trends and Arabica prices have dropped from 140 cents per pound to 120 cents in the New York market in a year. Robusta prices too have followed the downward trend, but not as sharp as in Arabica.
In the international market, the leading producers Brazil, Indonesia and Columbia are having bumper crops this year.
Columbia, which had gone for a massive re-plantation a few years back, is seeing production going up year after year. Better mechanization and cultivation techniques have helped Brazil do away with its alternate “on and off-years”.
According to reports, global coffee production touched a record high level of 158.93 million bags (one bag is 60 kg). The situation may not look supportive of exports. But, surprisingly, exports have risen around 17 per cent since the beginning of the calendar year. As per the Coffee Board data, the country exported 151,435 tonnes of coffee against 129,534 tonnes between January 1 and May 3, 2018.
“While the international prices have come down, the premium of 18 to 20 cents for Indian Arabica has come down to 10 to 12 cents. In the case of Robusta, the premium is down from $250 per tonne to $150-180 per tonne,” said Rajah.
Exports are expected to remain higher than last year for the next few months.