MADIKERI: Coffee prices have been falling sharply since January, compounding the worries of drought-hit growers.
The prices of a 50-kg bag of Arabica parchment coffee slid to Rs 7,800 on Thursday from Rs 9,700-9,800 levels in January, accounting for about a 20 per cent fall in four months. The prices had been in the range of Rs 9,000-10,000 for three years before the slide began.
However, Robusta coffee prices have remained relatively stable, falling a little over 7 per cent to Rs 6,500 a bag (50 kg) from Rs 7,000 in January, trader Rajiv Kushalappa told Express on Thursday.
What has baffled growers is that coffee prices have come down despite an 8.5 per cent fall in India’s coffee output this year.
While the Coffee Board said it is trying to figure out the reasons for the decline in prices, local markets appear to be reflecting the trend elsewhere in the world.
Coffee prices hit a seven-month low on London Commodity Exchange on Wednesday and the trend was similar in Vietnam and Indonesia. According to media reports, coffee exports from Vietnam was down 17 per cent in April month-on-month, but it was still above the market expectations, perhaps having a bearing on market sentiments across the world including India.
India produces about 3.5 lakh tonnes of coffee annually of which more than 70 per cent is exported. Kodagu district alone produces 1.2 lakh tonnes from 1 lakh hectares, which is 30 per cent of the nation’s output. Chikkamagalur is another major coffee growing district. However, the fall in the raw coffee prices has not benefited the consumer. Experts said there will be a time lag between wholesale and retail prices for the consumers to benefit.