KOCHI: Torrential rain and floods in coffee growing areas in Kerala and Karnataka have worsened the shortage of robusta beans, hitting hard exporters and local producers.
The production of robusta, which accounts for majority of coffee exports from the country and is the chief ingredient for instant coffee, was last year 10-20% short of the Coffee Board’s projection of 2.21 lakh tonnes. The inclement weather is expected to pull down the crop for the next harvest slated to take place by December. The arabica crop hasn’t been affected much.
“In the current situation we may end up 20% short when we were expecting a better robusta crop,’’ said N Sathappan, director of SLN Coffee, which buys large quantities of coffee for export and domestic sales. The company has presence in the local market through its Levista brand.
Heavy rains have caused widespread damage to coffee in parts of Kodagu in Karnataka and Wayanad in Kerala. The shortage has already increased the price of robusta in the market by more than Rs 10 per kg to Rs 135-140 per kg now.
“Further rise is in store in the coming months. But if there is good sunshine, robusta can recover. A clear picture may emerge only by the end of September,’’ said MN Jaideep, manager of J Thomas India, a coffee auctioneer.
In such a scenario local producers have opted to wait and absorb the loss. “We may not increase the retail price of coffee,’’ said Sathappan.
Higher price of coffee may hit exports, which are already looking sluggish. “Coffee exports in the calendar year 2018 may fall 10%. Shipments may decline in the coming months as the local prices are higher than international prices,’’ said MP Devaiah, business head, Coffee of Allanasons, an exporting firm.
The absence of much carryover stock is also a source of worry for exporters.
Source: economictimes.indiatimes.com