Producer prices for arabica parchment are hovering at record highs of around 15,000 per 50 kg bag, following a global trend of rising coffee prices after bad weather hit supplies from Brazil.
However, growers fear that concerns about the spread of Omicron could limit their earnings. In addition, prolonged cloudy weather delayed the drying process, increasing production costs.
Prices for arabica parchment in Karnataka are about 50 percent higher from 10,000 yen per bag during the same period a year ago. Likewise, prices for Arabica cherries are up 70%, to around 6,000 to 6,400, from 3,500 to 3,700 a year ago.
âIn terms of rupees, this is the highest price. We haven’t seen such prices, âsaid Bose Mandanna, an arabica grower in Kodagu. Rains from October to November affected the harvest, resulting in increased production costs for producers, Mandanna said.
Monsoon impact
The prolonged monsoon this year has hit the Arabica crop hard and losses are estimated at around 30 percent of the crop compared to 99,000 tonnes last year.
The USDA India Post, in its recent estimate, established a decline in the 2021-22 Arabica crop at 76,800 tonnes. The non-seasonal rains in November are expected to impact Arabica crop yields by 2% and delay the harvest by at least two weeks, the USDA said.
âIt’s a record price. This is the first time we are seeing this award, âsaid BS Jayaram, an arabica grower in Mudigere, Chikmagalur. âNow the prices are good for arabica but we don’t have a good harvest this year. There is about a 30% drop in harvest this year due to heavy rains and berry droppings, âhe said.
Some traders buy good quality arabica parchment at 15,000-16,000 per bag, but are strict on quality parameters. The purchase price of Arabica parchment at Coffee Marketing Co-operative (Comark), which was 14,900 yen on Sunday and down 14,600 yen on Monday, November 30. Jayaram attributed the price drop on Monday to concerns about the spread of Omicron.
Difficult process
âThe growers have tried to dry their coffee for the past 30 days. Small producers who do not have dryers or polyethylene houses have found it difficult to dry their produce. Drying coffee is a labor intensive process and the prevailing weather has driven up expenses. With good sunlight, coffee can be dried in seven days. It’s been over a month now, but growers are still struggling to dry their coffees. Harvesting and drying costs, which were around 2,000 to 3,000 yen, have now dropped to 7,000 to 8,000 yen per bag, âJayaram said.
âArrivals are slow and prices are firming up. There were aggressive buying from some exporters at the start of the year. Overall, we expect arabica prices to remain firm, âsaid Ramesh Rajah, president of the Coffee Exporters Association.
Rajah said the rains have delayed the harvest by about three weeks, while some growers may delay production. Regarding the threat Omicron posed to Indian coffee shipments, Rajah said it was too early to comment on the impact. “Shipments are slow due to slow arrivals and are expected to resume from January,” he said.