Over the past few days, raw coffee prices have increased, bringing some respite to struggling growers. As a result, rather than selling their beans “outright,” the bulk of growers are turning to “consignment sales.”Growers are holding their products with coffee curers through consignment sales in anticipation of future price increases. Stakeholders claimed that the crop was smaller than anticipated based on the recent firm trend in prices. Farmgate prices for unroasted coffee, such as arabica parchment, have increased by about 11–13% since the end of December when they were regulated at $13,000–13,500 per 50-kilogram bag. Similarly to that, the price of an arabica cherry is currently ranging from $7,200 to $7,450 ($6,450 to 7,000 as of December 29, 2022).
Prices for robusta parchment are circling around $9,800 – 10,300 levels (8,000 – 8,300), however, robusta cherry prices are dominating at $4,600 – 4,900 (4,300 – 4,550). While producers are busy collecting robusta beans in Karnataka’s major growing regions, which produce more than two-thirds of the nation’s coffee, the mild type arabica harvest is virtually finished. The bulk of growers have collected a lesser crop, therefore arabica production is lower than expected. The arabica crop will be slightly larger this year than it was last year, though. The robusta crop has decreased. According to Mahesh Shashidar, chairman of the apex organization for coffee growers in Karnataka, robusta prices are really holding very solid because the global market is also feeling a shortage.
The increase in pricing was attributed to the demand condition by Bose Mandanna, a significant farmer in Suntikoppa, close to Madikeri. Mandanna stated, “The crop is not that wonderful because there was damage from significant rains and those who have commitments are trying to cover it.”A smaller arabica crop, according to Ramesh Rajah, president of the Coffee Exporters Association, was to blame for higher prices, notwithstanding a slowdown in export demand as a result of more need-based purchasing by foreign consumers.
According to what we’ve heard, order books are low, Rajah said, noting that it’s unclear how the recession in the West is affecting people’s consumption of coffee. Since 97–98% of coffee growers lack storage room, they often store their produce via curing processes. In comparison to outright sales, the proportion of consignment sales is higher this year, according to a Chikkamagaluru coffee seller. Growers store their fruit with the curing works and sell it at a later time in a consignment sale.