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Madikeri: The impact of extreme climate events, such as untimely rains, wildfires, and droughts across South Asia and Latin America, is driving up coffee prices, according to industry experts. These disruptions, coupled with Indian consumers’ growing preference for coffee, are benefiting local producers.
The demand for coffee in India has surged, creating a favourable market for coffee farmers in Kodagu and other parts of the country where coffee is grown, according to a report published in DH.
“Local markets are thriving due to the increasing demand. Most farmers are in a good position, selling out their stock every year and earning higher profits. They no longer need to wait for traders or worry about unsold inventory,” said Viggnesh V, a coffee industry consultant.
The rise in coffee prices is expected to continue for the foreseeable future. However, experts have cautioned that the trend may soon reach a tipping point. “Prices will likely plateau in the next two years. If they exceed a certain threshold, the entire value chain could find it unaffordable,” Viggnesh added.
In 2024, coffee prices, especially for Arabica beans, reached a 13-year high due to ongoing supply disruptions. Prices have surged by approximately 40% this year as shortages of Robusta, a more affordable coffee bean, have led to increased demand for the premium Arabica variety, which is favoured by specialty coffee chains.
India is a significant player in the global coffee market, with two primary varieties of coffee grown: Arabica and Robusta. Arabica, known for its mild, aromatic flavour, is more sought after than Robusta. According to the Food and Agriculture Organization of India, around 70% of India's coffee production is exported. The country ranks fifth globally in coffee exports, making it a key player in the international market.
Karnataka leads coffee production in India, accounting for 71% of the country's total output, primarily producing Robusta beans. The remaining production comes from Kerala, Tamil Nadu, and the northeastern states. In the 2023-24 season, India produced 374,200 metric tonnes (MT) of coffee, with Karnataka contributing 266,885 MT.
As coffee prices continue to climb, Indian producers are benefiting from the growing demand both domestically and internationally. However, concerns over affordability in the value chain may pose challenges in the future if prices continue their upward trajectory.
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