Coffee prices leave bitter taste; increase 10% in Nov

Prices of coffee globally continue to increase amid expectations of a global deficit in 2019-20. In India they are moving in tandem. However, growers are saying while prices of Arabica match only the cost of production, prices of Robusta fetch 10-12 per cent more than the production cost.

Prices are expected to increase since deficit in coffee year 2019-20 is estimated at 502,000 bags.

The month of November marked the first time in the last 12 months when the International Coffee Organization (ICO) Composite Indicator consistently stayed over $ 100 cents/lb (pound). The daily price of the ICO composite rose from $ 102.74 cents/lb at the beginning of November to a high of $111.86 cents/lb on November 25, 2019, before closing the month at $ 111.77 cents/lb. The daily price has been on an upward trend since mid-october 2019, and in

November it grew 10.1 per cent higher than last month to average of $107.23 cents/lb.

Global exports of coffee in October 2019 fell by 13.4 per cent, to 8.91 million bags, compared to the same month in the previous year. A mix of factors, including unfavourable weather patterns and prolonged low international prices, have contributed to a decline in shipments across all regions.

Rohan Colaco, planter from Karnataka and a member of Karnataka Planters Association says the prevalent prices for Arabica only match production cost while those for Robusta are 10-12 per cent over production cost. Karnataka accounts for nearly 70 per cent of coffee production in the country.

Global exports in October 2019 totalled 8.91 million bags, their lowest monthly level since September 2017. This represents a drop of 13.4 per cent compared to the same period in the previous year, and of 2.4 per cent compared to October 2017. The decline was mainly due to 12.9 per cent drop in Brazil exports. Exports from Asia, including India, and Oceania dropped by 23.5 per cent in October.

Shipments of Robustas fell 21.6 per cent to 2.82 million bags and Arabicas fell 9 per cent to 6.08 million bags.

Exports from India were estimated at 350,000 bags in October 2019, 2.5 per cent below the same period a year earlier and 22 per cent below the same period in 2017.