As coffee futures markets continue to surge to fresh record highs in New York and London, farmgate prices in India, mirroring the global trend, have soared to new highs. Last week, farmgate prices of arabica parchment, the premium arabica variety breached the ₹25,000 mark per bag of 50 kg and robusta parchment crossed the ₹22,000 levels.
As prices continue to move up, growers are reluctant to sell, which exporters fear would impact the shipments. Over the past two months, farm gate prices have moved up by about 25 per cent from early December levels. “Even at these level, growers are reluctant to sell. They are selling on need basis, which is very small,” Ramesh Rajah, President, Coffee Exporters Association, said. “This is not just only in India. Even in Vietnam, we have seen the same thing, where growers are reluctant to sell,” he said.
Exports volumes
“Exports may rise in value terms due to high prices, but in quantity terms, we expect it to be down. Arrivals are very slow and carry-forward stock also were low.” Rajah said adding that “we see at least a 10 per cent decline this quarter,” Rajah said.
Global coffee prices have been soaring over the past two years on tight supplies in large producers of Brazil and Vietnam. The recent reports of fall in output in Brazil have lifted the prices further.
AN Devraj of Sarathy Coffee Curing Works in Chikmagalur said growers, who were selling earlier, have slowed down after the recent report of supply shortage in Brazil. “We used to get about 1,500-2,000 bags daily. Now it has come down to 500-600 bags in the last week. People are holding back. They do not want to sell, but are sending on a consignment basis,” Devraj said.
Selling per need
On consignment basis, growers are sending their coffees to the curing works for storage and sell them whenever they need. “Coffee is coming out on consignment basis. Much of the small growers are sending on consignment basis. They are also part selling, whereas some of the large growers are holding back,” Rajah said.
Further, despite the high prices, demand exists for Indian coffees. Rajah said export orders from smaller consumers are there, but not heavy volumes. “We are seeing some buyers wanting coffee, who didn’t stock up in September. And, you know, some of them feel that they have to start covering now. Because prices keep going up, you see some small volume inquiries,” he said.
Meanwhile, the growers are waiting for the prices that will be announced on Tuesday morning. “Since the terminal markets are closed on Saturday and Sunday, Friday’s prices prevail till Monday 2 pm. New prices will be announced by traders on Tuesday 11 am,” said Bose Mandanna, a large arabica growers in Kodagu.
“Growers are selling in small quantities at these prices. Since the growers have a much smaller crop, they are waiting for better prices,” Mandanna said.
