The Hindu Business Line : Coffee prices soften under surplus pressure

THE rally in coffee prices at the beginning of the current coffee season seemed to have belied the hopes of growers' as it was short-lived. With prices continuing to rule at close to 30-year lows, the watchword for coffee growers for the next one-year would be "how to survive", said Mr Anil Kumar Bhandari, Vice-President of the United Planters Association of Southern India.

Replying to a query at a press conference organised by the Karnataka Planters' Association, Mr Bhandari said the rise in coffee prices witnessed at the beginning of this calendar was speculative and notional. "There continues to be an overhang surplus in the global market which is putting pressure on the prices," he said adding that the annual surplus estimated to be between 8-10 million bags of 60 kg each.

Prices of arabica parchment at the farm gate in Chikmagalur had increased to Rs 2,300 per bag during January this year, as compared to Rs 1,800 in January 2002. Similarly, robusta cherry fetched Rs 870 per bag this January as against Rs 440 in January last year.

However, the prices have fallen subsequently to Rs 1,890 per bag of arabica parchment and Rs 725 per bag of robusta cherry, Mr Philip said. "The slight increase in coffee prices has nowhere helped the cause of coffee growers," said Mr Cherian Philip, Chairman of Karnataka Planters Association.

The coffee producing countries world over are facing similar situation on the price front and some countries have initiated measures to overcome the crisis, Mr Philip said adding that a small increase in per capita consumption was enough to improve the situation of the industry in India.

"We request the Government to provide adequate funds for generic promotion of coffee from the Plan Funds of the Commerce Ministry," he said.

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