BENGALURU: Indian coffee prices are expected to witness a sharp decline since demand for the beverage has plummeted sharply post Covid-related disruption in key international markets including Europe. Prices of both the Arabica and Robusta varieties are already lower than last year.
According to Karnataka Planters Association (KPA), Arabica parchments are selling at an average of Rs 9,600 per 15-kilo bag now compared to Rs 11,000 last year. Similarly, prices have fallen by more than half to Rs 5,600 per 15 kg bag for robusta parchments.
The KPA estimates that the prices are likely to reduce further with a second lockdown now in place in various European countries. This holds especially true for premium coffee varieties which are mainly used in cafes that are currently shut. There are also fears that Indian varieties may be replaced by cheaper substitutes.
India’s coffee exports suffered losses worth over Rs 200 crore due to the pandemic and the industry estimates this to rise to Rs 700 crore. Poor weather and the pandemic have already impacted nearly 60-70 per cent of coffee produce in various districts of Karnataka. The state currently accounts for more than 70 per cent of India’s coffee production. Domestic production for 2019-20 stood at 2,98,000 MT against 3,19,500 MT in 2018-19.
With over 50 per cent of the 5 lakh workers on coffee plantations hailing from other states, a labour shortage is looming. “The shortage of workers from North India will pose a serious challenge to the growers here. Any delay will hamper coffee production, especially if they are not picked and processed on time,” Shirish Vijayendra, chairman, KPA said.