INDIA – India’s coffee industry is experiencing a significant boost as robusta coffee bean prices soar to an unprecedented Rs 10,080 (US$120.57) per 50 kg bag, marking a historic high since the establishment of coffee estates in the Western Ghats region during the 1860s by the British.
Robusta coffee, known for its strong flavor and lower input costs compared to Arabica, has traditionally maintained relatively stable prices.
However, the recent surge in robusta prices brings relief and joy to coffee growers, particularly those with smaller holdings, who have faced challenges such as erratic rainfall, crop damage by wildlife, and rising input and labor costs over the past decade.
According to Nanda Belliappa, chairman of the Codagu Planters Association, the surge in robusta coffee prices can be attributed to the basic principles of supply and demand.
Factors such as decreased coffee production in major robusta-producing countries and shifting cropping patterns have contributed to this windfall for Indian growers.
Sources within the Coffee Board of India also point to major robusta coffee growers like Vietnam and Indonesia shifting to more profitable crops, as well as an increasing demand for coffee in the cosmetics industry, as drivers of the price surge.
While Karnataka, Kerala, and Tamil Nadu collectively contribute to 83 percent of coffee production in India, coffee plantations in Karnataka have faced challenges in recent years, with many farmers selling their land due to diminishing returns and labor shortages.
Somaiah, a coffee farmer, highlighted the scarcity of skilled workers and the steep increase in labor costs, forcing planters to rely on migrant laborers from Bengal and Assam.
Moreover, wildlife encroachment poses a significant threat to coffee plantations, with elephants, bisons, monkeys, and giant squirrels damaging crops in search of food and water.
Despite these challenges, the surge in robusta coffee prices offers a glimmer of hope for Indian coffee growers, signaling a potential turnaround for the industry after years of struggle.
In line with the surge in prices, coffee shipments from India rose 13.35 percent during the January-March period of this year, driven by higher demand for robusta coffee.
Export of robusta coffee bean rose by 18 percent compared to the same period last year, while Arabica coffee bean shipments declined.
Total coffee exports during January-March 2024 reached Rs 3,644 crore (US$436,226.88), indicating a substantial increase from the previous year.
The unit value realization was Rs 2,90,057 (US$3472) per tonne, reflecting the positive impact of the surge in coffee prices on the industry’s overall export performance.
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