Farmgate prices of arabica coffees have see over 33 per cent decline from their peak levels over the past four months tracking global trends ahead of the harvest season starting November. Higher output coupled with improving weather condition boosting prospects of next year’s crop in Brazil, the largest coffee producer, is seen weighing on prices.

HT Mohan Kumar, President, Karnataka Growers Federation, said the Brazilian harvest for 2023 has been good, while the prospects look better for the next crop. With improving supply of arabicas prices have come down, he said.

In India, the farmgate prices are down by about ₹5,500 over the past three months. From around ₹16,000-16,500 levels per 50-kg bag in May, Arabica parchment prices have come down to levels of ₹10,500-11,000 — a decrease of about 33 per cent. Arabica cherry prices have declined to ₹6,300-6,600 levels from around ₹7,900-8,000 inMay-end, a dip of around 17-20 per cent.

Robusta holds ground

However, the robustas are holding good as the rate of decline is lower than the arabicas. Robusta parchment are ruling around ₹9,500-9,900 levels compared with ₹10,450-10,800 levels May-end. The robusta cherry, the widely-produced coffee variety in the country, is seen holding around ₹5,850-6,200 levels compared to ₹5,900-6,000 levels in May-end.

“Robustas are seen holding as roasters say they are being increasingly used in Espresso blends,” said Mahesh Shashidhar, Chairman, Karnataka Planters Association. Crop concerns in Brazil have dissipated with many growing areas receiving good rains, as a result prices of arabicas are down, Shashidhar said.

In key-growing regions of Chikkamagaluru, Kodagu and Hassan, the harvest of arabicas is set to begin. “In fact in some plantations, say about less than 5 per cent of the area, arabicas have ripened and growers are picking the crop. The uneven rainfall witnessed throughout the season has resulted in early harvest in some areas,” Kumar said.

The main picking will start from early December. Coffee-growing regions have been receiving rains of late. “We don’t need the rains next month, else it may hurt the ripening process,” Kumar said.

₹41 wage hike

While the fall in prices has triggered concerns among the section of growers, as it would hurt their realisation, the increase in minimum wages will also add to the cost pressure, Kumar said. Daily minimum wages have been increased recently to ₹464 from the earlier ₹423, he said.

Meanwhile, a section of growers, who were holding on to Arabicas have been caught off-guard with the fall in prices. Ramesh Rajah, President of the Coffee Exporters Association, recently told businessine that the availability of arabicas during the export season this year was an issue impacting shipment volumes. A section of growers and the trade in the interior parts of the growing regions held back arabica coffee, which is now coming into the market, Rajah said.

India, the fifth largest exporter, ships out about two-thirds of the 3.5 lakh tonnes produced in the country. The crop year for 2023-24 starting October is likely to be lower, impacted by uneven rains. The Coffee Board had pegged the 2023-24 crop size at 3.74 lakh tonnes in its initial or post blossom estimates, higher than previous year’s final estimates of 3.52 lakh tonnes. Of the 3.5 lakh tonnes, robustas account for a larger chunk of around 2.5 lakh tonnes, while arabicas account for the rest.