Wayanad: Despite a decline in coffee production, farmers in the South Indian coffee hubs of Wayanad, Coorg (Karnataka), and Nilgiris (Tamil Nadu) have reason to cheer as Robusta coffee prices continue to rise.

With rates rising steadily, expectations are high that the price of dry coffee berries will soon surpass the coveted Rs 300 per kilogram mark. Additionally, the price of Arabica coffee seeds has also scaled up, crossing the Rs 600 mark recently in the Bengaluru market, which was only Rs 450 per kg during the same season in 2024.

According to George Daniel, Deputy Director of the Regional Coffee Research Station in Chundel near Kalpetta, price predictions are also high, and multiple factors have contributed to the price hike. "The major factor is the expected dip in domestic production, which is 15 per cent," he said.

"There are also global factors, such as a sharp decline in the production of Arabica coffee in Brazil, and now Robusta coffee is filling the gap," he added. The upgraded processing quality has also contributed to the price increase.

"The Coffee Board and private companies have also contributed to the quality upgradation process," he said. While small farmers did not benefit from last year’s price hike, as only a few had held back their produce, this year, farmers across the spectrum have received higher prices.

However, market players, as well as farmers, say that the dip in production is very noticeable (30 to 50 per cent) in non-irrigated farms, whereas in irrigated farms, production was almost the same as last year.

It is to be recalled that during the same period in 2023, the price of dry coffee beans was Rs 80 per kg in the domestic market, and in January 2024, the price was Rs 171 per kg.

In 2024, when the coffee prices for dry beans crossed the Rs 150 mark, it made headlines. The coffee prices have not decreased over the past few years but have maintained a steady increase. This year, when the harvest season began, the price of dried coffee berries was Rs 235 per kg.

The price of 1 kg of dried coffee berries on Monday in the normal Wayanad market was Rs 265, whereas major players in the industry, including export agencies, purchased the berries for a higher price (Rs 275 per kg) from both farmers and traders, expecting a slump in this year’s production, said a trader who preferred anonymity. The dip in production has also forced buyers to purchase the maximum amount of coffee to secure their share of exports as soon as possible.

"My harvest is almost over, and I have seen a production dip of nearly 20 per cent this year," said Saju Chirakkarakkuzhiyil, a farmer from Vakery near Sulthan Bathery. "Despite the extra care I have given to my coffee farm, the dip is there," he said, adding that the production decline would be much higher in less attended farms.

"At present, only small-scale farmers are releasing their stock, whereas medium and large-scale farmers are still holding onto their stock, expecting a price hike," he added.

The situation is almost the same in Coorg and Nilgiris, according to market players. In Coorg, extreme temperatures during the flowering season resulted in the production dip. For many days, there was no rain post-flowering, it was pointed out.

According to a Coffee Board official from the Nilgiri district, feedback from farmers suggests a 25 per cent dip in production. “We are currently in the second round of harvest as ripening was delayed,” he said, adding that an exact figure could only be determined after the harvest is completed.

Coffee export predictions have also recorded a decline of more than 10 per cent. According to estimates from the Coffee Board, during the marketing year of 2023-2024, which ended in September, the country harvested 3,74,200 metric tons of coffee, including 2,61,200 tons of Robusta and 1,13,000 metric tons of Arabica.

There is a decline in production worldwide, including in Brazil, the largest coffee producer globally, and Vietnam, the second-largest coffee producer. Experts point out that due to hostile climatic conditions, there could be a sharp decline in coffee production next year in Brazil, for which 'hostile weather' warnings have already been issued. Moreover, Brazil’s coffee stock has nosedived to less than 2 million bags (60 kg each) from 5.5 million bags last year.