Farmgate prices for arabica parchment in Karnataka have dropped to around Rs 14,000-14,500 per 50-kg bag for the new crop, a 15% drop. The harvest of early ripened beans, known as fly picking, has begun in parts of Kodagu and Chikkamagalur, two important arabica growing regions.
Similarly, arabica cherry prices have dropped by 25% to around Rs 6,500-7,000 from around Rs 9,000-9,250 at the end of August. However, prices for arabica parchment and arabica cherry are currently higher than during the same period last year. Arabica parchment prices were around Rs 12,600-12,800 per 50-kg bag at the end of October last year, while arabica cherry prices were around Rs 5,400-5,600 per bag.
December arabica futures on the ICE have fallen from around $2.28 per pound in early October to less than $1.80 now. Similarly, March 23 futures prices have dropped from around $2.15 to around $1.77 per pound. Robusta farmgate prices in Karnataka have also fallen, though not as dramatically as arabicas. Prices for Robusta parchment have dropped from around Rs 10,200-10,250 in late August to around Rs 9,000-9,100 now. "The global market for arabica coffee is shrinking by the day. It has fallen from a high of 242 cents per pound to 169 cents. The rupee's drop, however, could have been much greater "said Suntikoppa arabica grower Bose Mandanna. Concerns about Europe's recession and the uncertainty of the war are also weighing on prices, he says.
The Brazilian crop appears promising, according to Jeffry Rebello, President of The United Planters' Association of South India (UPASI). All commodities face a challenging global macroeconomic environment. According to Rebello, higher interest rates, inflation, and global tightening are putting pressure on markets. The Karnataka Planters' Association (KPA) Chairman, N Ramanathan, attributes the price drop to trader speculation, noting that prices always fall around Diwali and during the New Year.
In some areas of Kodagu and Chikkamagalur, fly picking, or the harvesting of early ripened beans for the 2022-23 crop year, has begun. However, due to an uneven and prolonged rainy season, as well as a lack of adequate sunlight, ripening is unlikely to be even, causing the harvest process to be prolonged. The Coffee Board predicted a record 3.93 lakh tonnes crop in 2022-23, with 1.16 lakh tonnes of arabicas and 2.77 lakh tonnes of robustas. However, the Board anticipates that the crop will be 10-15% lower than initial estimates due to the excessive and continuing rains.