Robusta coffee prices hit a 13-year high

Written by Jaishankar Jayaramiah | Bangalore, Mar 12 | Updated: Mar 13 2008, 04:42am hrs
Robusta coffee price has touched a 13-year high on the back of tightening demand for the commodity in the international markets. But farmers across the globe are not in a position to celebrate the commodity fetching premium prices as they witness cut in margins due to rising input costs, fertilizers in particular.

Coffee prices in the international markets recorded further rise during February 2008, with the monthly average of the International Coffee Organisation (ICO) indicator price touching 138.82 cents per lb, an increase of 13.5% compared to the January average of 122.33 cents per lb. In the case of Robustas, the ICO indicator price exceeded the mark of 115 cents per lb, the highest level recorded since August 1995.Intense activity witnessed on both the New York futures market for Arabicas and the London futures market for Robustas that led to increased price volatility on these two exchanges, said ICO's executive director Nestor Osorio in his statement issued on Tuesday.

Although the commodity price increased, margins are not ruling at premium levels due to rising input costs. The prices of the fertilizers most commonly used in coffee growing, such as phosphate, potash and urea have increased steeply on account of the sharp increase in the prices for oil-based products. In fact, coffee farmers are cutting down their use of these inputs, which are required for the poor quality of soils. According to the latest ICO report, the cost of phosphate has more than trebled to $450 per tonne in January 2008 at the global markets from $100 in December 2006 while potash price increased to $225 per tonne from $140 per tonne.