Dip coffee prices worries growers

The drastic  price drop in Coffee and pepper  in recent months worries growers  much as Coffee is life line of this  tiny district. The district accounts for more than 30 percent of the nation’s coffee production and 15 percent  of state’s pepper production.
Coffee is being grown in more than one lakh hectares of land in the district with production of 1.2 lakh tonnes, while pepper  production
is approximately 5500 tonnes with area of 11,000 hectares. Pepper is being grown as inter crop along with coffee.

In the month of January 2017, a 50 kg Arabica parchment coffee bag was sold at Rs 9700-9800 but today the price has slid down to Rs 7800.  The
country produces  3.5 lakh tonnes of coffee  annually of which more than 70 percent is being exported to foreign countries. Since last three years, the price was Rs 9 to 10,000 approximately per 50 kg Arabica  parchment. When contacted, a coffee trader  Rajiv Kushalappa told  on Wednesday that  the price of Arabica has dropped much compared to Robusta owing to variations in international market. He said Robusta
parchment is being sold at Rs 6500 per 50 kg bag, while the price was Rs 7000 during January this year.

Pepper which used to fetch good income to growers is disappointing this year owing to price drop. Just two months back, pepper was being sold at Rs 580 per kilogram. Now, it has come down to Rs 460.
A progressive coffee grower of Takeri in Somwarpet taluk, B B Sathish told that pepper was fetching good income for every coffee grower owing to better price in international market.  But this year, pepper price
also came down adding woes to growers who are in distress due to drought in the district. He said   nowadays, pepper growing requires lot of care
since vines drying in many estates due to disease and lack of rainfall.

Market sources told that  pepper price is around Rs 300 per kg in Vietnam and exporters  opt to buy from there. The source also told that the country’s total pepper production is 52,000 tonnes of which state’s share is 40 percent. But  price drop in Vietnam does not affect local market as  more than 60 percent of production is being consumed indigenously.

Market experts say that growers should not    panic about price fluctuations as the price drop is temporary and price would go up. They advised growers to sell their coffee and pepper stocks  part by part, avoid panic selling.

Effect on the retail market: The retail consumers however may not feel the effect of the sliding prices of coffee immediately as the price indexing or the swing in the prices has a gap of not less than a fortnight between the raw coffee and powdered coffee sold to the consumers over the counter. The price of the coffee for the retail market is dependent on the rates at the auction at the Coffee Board in Bengaluru. Benefit of lower prices cannot be passed on to the consumer unless the prices are stable for more than 15 days say the Coffee Board officials.

*Coffee powder sold at the counter to the consumer will be blended with chicory as flavour an additive will have its own value addition, so the
priceline at the consumer level might not reflect the decrease in prices of raw coffee.

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