Indian Arabica Coffee Prices Hit Record High

Indian arabica parchment coffee prices have soared to a record high, crossing $4,68 per kg last week. This surge aligns with global price trends. However, heavy rains caused by Cyclone Fengel across key coffee-producing regions like Kodagu, Chikamagaluru, Hassan, and Shevaroys have raised concerns about crop quality and delayed harvesting processes.

Erratic weather patterns have already delayed this year's arabica harvest by three to four weeks, and unseasonal rains are now complicating it further.

Current Coffee Prices 

As of Monday, arabica parchment was trading between $4,55 and $5 per kg, while arabica cherry prices ranged from $2,69 to $2,80 per kg. Robusta parchment was priced between $4,43 and $4,55 per kg, and robusta cherry stood at $2.62 to $2.69 per kg. These prices are over 33 percent higher compared to the same period last year.

Despite the price surge, many buyers are hesitant to commit to purchases. “Prices are at a record high because of crop losses, which cannot be compensated immediately,” said Pramod Somiah, a coffee processor in Gonikoppa. He added that most buyers might wait for 15 to 30 days before re-entering the market.

Cyclone-Induced Rains Challenge Growers

The recent rains have created additional difficulties for growers, who have just started harvesting. “Harvesting and drying are becoming major challenges due to these rains, and it’s uncertain how many growers will actually benefit from these high prices,” Somiah explained.

Ramesh Rajah, President of the Coffee Exporters Association, expressed concerns over potential fruit splitting and dropping caused by continued rains, which could further affect quality. Exporters are adopting a cautious approach, reluctant to commit to purchases amid uncertainties about crop output and quality.

Export Market Challenges

In Europe, India’s main coffee export destination, demand has slowed following aggressive purchases in anticipation of new EUDR regulations. This has created a lull in the market, with exporters preferring to wait for greater clarity on crop output and quality.

Growers like M. Salman Baseer, Vice-Chairman of the Karnataka Planters Association, noted that prolonged rains could exacerbate quality issues. He also highlighted rising labor and wage costs, which are eroding the potential gains from higher prices. “While the price rise is positive, additional expenses and quality concerns are dampening the optimism for many growers,” Baseer said.

Conclusion

The Indian arabica coffee market is experiencing unprecedented price increases, offering a potential lifeline for growers. However, the benefits are tempered by unseasonal rains and their impact on quality and harvesting. Exporters remain cautious, and growers hope for stable weather conditions to prevent further losses. While the price surge is promising, the challenges posed by weather and rising costs make this season a complex one for India’s coffee industry.





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