The surge in coffee futures markets continues as prices hit new record highs in New York and London, reflecting a global trend that is also impacting farmgate prices in India. Recently, the farmgate prices of premium arabica parchment crossed the ₹25,000 mark per bag of 50 kg, while robusta parchment exceeded ₹22,000 levels.
With prices on the rise, growers are hesitant to sell their produce, causing concern for exporters who fear a hit on shipments. Over the past two months, farmgate prices have seen a 25% increase from early December levels. Ramesh Rajah, President of the Coffee Exporters Association, noted that growers in India and even in Vietnam are reluctant to sell at these high prices.
This reluctance to sell could potentially impact export volumes, with Rajah predicting a 10% decline in quantity this quarter despite a rise in value terms due to high prices. The global surge in coffee prices over the past two years, driven by tight supplies in Brazil and Vietnam, has been further heightened by recent reports of output shortages in Brazil.
Growers in India, influenced by the supply shortage reports from Brazil, have slowed down their selling activities. AN Devraj of Sarathy Coffee Curing Works in Chikmagalur mentioned a significant decrease in daily bag arrivals, with growers opting to hold back their produce or send it on a consignment basis for storage and sell it later as needed.
Despite the high prices, there is still demand for Indian coffees in the market. Export orders from smaller consumers are present, although in small volumes. Additionally, growers are awaiting the prices to be announced on Tuesday morning after the weekend break in terminal markets.
According to Bose Mandanna, a large arabica grower in Kodagu, growers are selling small quantities at these high prices while waiting for better prices due to smaller crop sizes. The uncertainty created by the global price surge has led to cautious selling habits among growers, who are keen on maximizing their profits in the current market conditions.
