The prices of coffee have picked up in the retail market after remaining at a low for the past two years. The prices in the retail market ranged from Rs.124 to Rs.130 a kg on Friday.
The prices of coffee had reached the bottom level of below Rs.100 during the last harvesting season. There are signs of a further increase in prices owing to the high demand in the international market. A senior official of the Coffee Board told The Hindu on Friday that the prices in the retail markets were decided by the prices in the international markets of London and New York. The prices were on an upward trend, mainly during September, to reach the present level.
Brazil the competitor
The Arabica and Robusta varieties were mainly cultivated in the State and the main competitor for Arabica is Brazil, its largest producer. Vietnam is the largest producer of Robusta coffee and the present demand in the international market is owing to a production fall in Brazil. The prices of the Robusta variety were correspondingly on the rise owing to an increase in demand in the world coffee blending sector.
According to the research wing of the Coffee Board, there may not be a serious slump in coffee production in the State owing to erratic rains. The official estimate is about a 10 to 12 per cent of production drop owing to the shortfall in the rains.
India accounts for the second largest production of coffee after Brazil. Of the 3,42,000 ha of land under cultivation, the average was 2,62,000 tonnes, as per the Food and Agriculture Organisation’s 2012 estimate.
Topper is Karnataka
Of the total production, Karnataka accounts for 71 per cent followed by Kerala (21 per cent) and Tamil Nadu five per cent.
Unlike other cash crops, small-scale landholders account for the majority of coffee production. However, the rise in the prices in the middle of the beans-growing season is unlikely to help the farmers.
The prices were on a downward trend for the past four years. A local businessmen at Kattappana, the main market for hill produce, said the prices were unlikely to fall, as they were on a steady rise. In the last harvest season, many farmers had abandoned crops, as the cost of labour was higher than that the price of coffee in the retail markets.
