 "Global price pressure in coffee export of Robusta variety")
Despite an estimated rise in consumption, global prices of Robusta variety of coffee, of which India is a major grower, are expected to fall a bit in the coming quarter.
This comes even though cultivation is expected to decline in 2016-17, due to a monsoon deficit. However, for growers of the Arabica variety, the price is expected to increase by around four per cent.
Arabica is now $135 a pound on the New York-based Intercontinental Exchange. It is estimated to rise to $138.4 in March and $140.7 in May. The London-based International Financial Futures and Options Exchange has forecast the price of Robusta to dip in January to $2,089 a tonne, from $2,103 a tonne in December, but expects it to rise in March to $2,095 a tonne.
"We have had bad weather this year, which can not only have an impact on this year's crop but the next crop as well. But, this would not indicate higher prices; those are globally set," said Ramesh Rajah, president, Coffee Exporters Association. The predicted prices are apparently below the cost of production here.
"We are going to see boom-bust cycle and right now are on the downside of the bust phase. The question is who is going to survive the bust," said Rajah. Growers in Brazil, Vietnam and Colombia survived with government support, he said.
Y Raghuramulu, director, research, at the Coffee Board said exports might dip a bit with the lower output in 2016-17. The post monsoon crop forecast is 316,700 tonnes (Arabica: 96,200 tonnes, Robusta: 220,500 tonnes) against the earlier one of 320,000 tonnes.
Exports in the first nine months of this financial year, April to December, stood at 261,536 tonnes, valued at Rs 4,001 crore, up from 219,232 tonnes (Rs 3,621 crore) a year before. The numbers include re-exports.
The reduction in the latest estimate is mainly from Karnataka, of 3,045 tonnes, followed by Tamil Nadu at 1,000 tonnes. Kerala's is higher by 850 tonnes.
The average annual growth rate in global consumption has been around 1.3 per cent since the coffee year 2012-13 (October to September).
Around 151.3 million of 60-kg bags was consumed in the coffee year 2015-16, from 149,395 bags a year before. In India, demand is growing at five to six per cent a year. In 2015-16, the demand was 1.35 million bags.
