India’s coffee industry is experiencing a windfall as robusta coffee bean prices skyrocket to an unprecedented INR 10,080 per 50 kg bag as of Friday. This price hike represents a historic high since the establishment of coffee estates in the Western Ghats region during the 1860s by the British.
While Arabica coffee, known for its creamy layer in a shot, has exhibited a relatively stable pricing trend, robusta prices have typically fluctuated between INR 2,500 to INR 3,500 per 50 kg bag for almost 15 years.
The spike in robusta coffee prices has brought a sense of relief and happiness to coffee farmers, particularly those with smaller farms who predominantly grow robusta because of its lower production expenses in contrast to Arabica. These farmers have grappled with various challenges over the past decade, including unpredictable rainfall, crop damage caused by wildlife, and escalating input and labor expenses.
G Nithin, a coffee cultivator in Chikkamagaluru, shared his excitement, saying, “I could hardly believe it, not even in my wildest dreams, that prices would hit the INR 10,000 milestone.” Nithin had already offloaded a portion of his inventory expecting prices to climb even higher.
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As per Nanda Belliappa, chairman of the Codagu Planters Association, the rise in robusta coffee prices can be explained by the fundamental principles of supply and demand. Factors like reduced coffee output in leading robusta-producing nations because of unfavorable weather conditions and shifts in cropping patterns have played a role in this boon for Indian growers.
Insiders at the Coffee Board of India also point to the price surge being linked with significant robusta coffee producers like Vietnam and Indonesia diversifying into more lucrative crops such as dragon fruits and avocados. Moreover, there’s a rising demand for coffee in the cosmetics sector.
Karnataka alone accounts for 70% of India’s total coffee production, with Kerala, Tamil Nadu, and other districts contributing 83% of the total. However, Karnataka’s coffee plantations have had difficulties recently. Due to declining profits and a labour scarcity, many farmers have sold their land to real estate developers or turned it into tourist attractions.
Somaiah, a coffee farmer, highlighted, “There’s a significant shortage of skilled workers to manage the estates, along with a sharp rise in labor expenses.” Planters have increasingly turned to migrant laborers from Bengal and Assam, who bring expertise from their work in tea estates.
Additionally, wildlife encroachment presents a substantial risk to coffee plantations, as elephants, bisons, monkeys, and giant squirrels cause damage to crops while seeking food and water.
Despite these obstacles, the upsurge in robusta coffee prices provides a ray of hope for Indian coffee growers, indicating a possible revival for the industry following years of hardship.
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