Indian coffee farmers are confident of fetching higher prices on the back of rising demand for the commodity in the international market.
The Arabic coffee harvest will start by the end of October in India. The farmers are expected to sell the commodity immediately to fetch higher prices but the exporters, who buy coffee beans, are likely to stock as they expect coffee price would further increase in the coming months.
International Coffee Organisation (ICO) too, in its latest report, said high price levels would continue in short-and medium-term as the industry would witness impact from climate problems, increased production costs and rising world consumption.
In the first week of current coffee year, the unit value of Indian coffee increased to Rs 1.08 lakh per tonne compared to Rs 1.06 lakh during the same period last year, as per statistics available with the state-owned Coffee Board. With global coffee prices increasing ahead of harvesting season in India, farmers are hopeful that exporters will procure higher volumes this season.
According to Coffee Board?s post blossom estimates, India?s coffee output in 2010-11 crop year is seen at 3.08 lakh tonne against 2.89 lakh tonne recorded in the previous year. The Arabic production is likely to jump to 99,500 tonne from 94,600 tonne while Robusta output is expected to increase to 2.08 lakh tonne from 1.95 lakh tonne.
?The coffee prices have started increasing from June onwards,? an Coffee Board official said. Referring ICO Composite Indicator Price, he said, ?The monthly average coffee price was in the range of US 123 to 126 cents per pound from January to May this year. The average price surged up to 142.20 cents per pound in June and further to 153.41 cents in July. It increased to 157.46 cents and touched 163.61 cents in September. Starting October, the prices have marginally fell but it is not likely to come below 150 cents.?
Prices are also expected to remain on higher side as opening stocks in producing countries for 2010-11 is estimated to fall below 12 million bags, , said ICO in its report.