
Rising Global Coffee Prices Make Indian Farmers Hesitant to Sell
Indian Coffee Growers Hold Back Sales
India’s coffee market is experiencing a sharp price surge, following global trends as farmgate rates climb to new highs. However, despite the rising prices, coffee growers remain hesitant to sell, which exporters believe could impact shipments in the coming months.Last week, arabica parchment prices rose to USD 6,00 per kg, while robusta parchment climbed to USD 5,28 per kg. Over the past two months, farmgate prices have increased by 25 percent since early December. Despite these gains, many farmers are selling only small quantities based on their immediate financial needs instead of taking full advantage of the price hike.
“This is not just happening in India,” said Ramesh Rajah, President of the Coffee Exporters Association. “Even in Vietnam, growers are reluctant to sell despite the price surge.”
Export Volumes Likely to Decline
While higher prices may push up export revenues, industry experts expect a decline in shipment volumes due to slow arrivals and low carry-forward stocks. "Exports could fall by at least 10 percent this quarter," Rajah said, explaining that farmers holding back their stock is further tightening supply.Global coffee prices have been rising for the past two years, mainly due to lower production in Brazil and Vietnam. Recent reports of a production shortfall in Brazil have pushed prices even higher, prompting many Indian growers to hold their stock, anticipating further price increases.
“In Chikmagalur, we used to receive 1,500-2,000 bags daily. Now, that number has dropped to 500-600 bags in the past week," said AN Devraj of Sarathy Coffee Curing Works. “Growers are not actively selling; instead, they are storing their produce and selling small batches when necessary.”
Growers Adopt a Wait-and-Watch Strategy
Despite these supply challenges, demand for Indian coffee remains strong. Exporters continue to receive small orders from buyers who did not stock up earlier. “Some buyers are now looking to cover their requirements because they fear prices will rise further,” Rajah said. “Farmers are selling in small quantities, but with a smaller crop this year, many are waiting for even better prices.Conclusion: Price Surge Could Impact Supply in the Coming Months
With coffee growers holding back stock despite record-high prices, exports may see a decline in the short term. Global supply shortages and rising demand continue to push prices upward, but exporters worry that delayed sales could disrupt supply chains even further. As growers monitor market trends, the coming weeks will be crucial in determining how much coffee actually reaches the market.Click here to reach our trading platfrom CMBroker
