Madikeri: The price of Arabica coffee has been falling for a week due to the ongoing war between Ukraine and Russia. The coffee industry is already struggling due to rising production costs, adverse weather conditions and falling prices in recent years.
Amid the difficulties, the country’s Arabica growers have had reason to rejoice over the past three years as the price of parchment Arabica coffee has jumped nearly 25-30%. This price increase is due to snowfall in Brazil, the largest Arabica coffee producing country in the world.
Last November, a 50 kg Arabica parchment was sold at Rs 11,700-11,800. Then the price jumped to 16,100-16,200. concerns of coffee growers. The state accounts for 70% of the country’s coffee production, with the small district of Kodagu alone holding 30% of the country’s production. The price of Arabica cherry also fell to Rs 7700 from Rs 8000. The price of Robusta parchment and Robusta cherry also fell by 2-5% in Chickamagalur and Kodagu markets.
Although the main reason for the fall in prices is the war between Ukraine and Russia, both countries are importers of Indian coffee. According to data from the Coffee Board, India exported 6604 metric tons of green, instant and fried coffee to Ukraine from April 1, 2021 to January 31. In the financial year 2018-2019, Indian exports to Ukraine amounted to 7327 metric tons. In the last fiscal year, Russia imported 23,519 metric tons of coffee from India.
Among 11 countries, Russia of the Commonwealth of Independent States (CIS) accounts for 74% of Indian imports, while Ukraine accounts for 20%. Although the main reason for the price drop is not the blocking of exports to the two countries, according to market experts. Uncertainty and fear in European markets about the impact of the war are the main reasons for the fall in prices.
Coffee is the lifeline of Kodagu and Chikmagalur districts in South Karnataka and almost 3 lakh families depend directly and indirectly on the coffee industry. If the war continues, the fall in coffee prices is evident and the increase in petroleum products, metals and cooking oil would have a negative impact on producers.