Arabica Prices Drop as Supplies From Latin America Flood Markets

B Thipperudrappa - CHIKMAGALUR

23rd December 2013

Coffee growers across the state who are in a crisis following the vagaries of weather and the rise in cost of cultivation have been hit again by a steep drop in Arabica coffee prices.

The price drop is said to be the worst in the last seven years as coffee from Brazil, Columbia and central America has been flooding the markets.

A 50-kg bag of Arabica was priced at `11,000 in 2011, while this year it has fallen to `6,100, a drop of 48 per cent. Robusta price has dropped to `2,500 for a 50-kg bag this year while in 2011 it was `3,800.

Former Karnataka Coffee Growers Federation president Attikatte Jagannath told Express that 50 to 60 per cent of the crop has been destroyed in some parts of Kodagu and Chikmagalur due to copious rain this year.

The Coffee Board’s final estimate of 3,18,000 metric tonnes of output for 2012-13 is likely to fall sharply because of disease, unseasonal rains, high cost of inputs and labour shortage.

Outgoing Karnataka Growers Federation president Pradeep said the problems of growers are compounded by the depreciation of the rupee against the US dollar following increased cost of imported equipment and petroleum.

Though there is a steep fall in the prices of Arabica parchment and Robusta, coffee powder has remained constant at `240 per kg.

There is a need for futures trading as advance selling will save growers with small holdings below 10 hectares from price uncertainty.

If the trend continues, the future of coffee could turn bleak, said Bhoje Gowda, a grower from Aldur.

The Union government and the Coffee Board should protect the growers, he said. Some experts feel that to help coffee growers, the consumption of the beverage should be popularised across North India on the lines of Coffee Day cafes.