This is the first time prices have soared to such heights since the inception of coffee estates by the British in the picturesque hills of the Western Ghats (Malnad) region of Karnataka, Kerala, and Tamil Nadu around the 1860s.
Unlike its esteemed counterpart, the Arabica variety, renowned for its capacity to produce a luxuriously creamy layer atop a shot, the robusta has maintained a comparatively stable price range of Rs 2,500 to Rs 3,500 per 50 kg bag for almost 15 years.
The unprecedented surge in coffee prices has elicited smiles among coffee growers, particularly those with smaller holdings, as they predominantly cultivate the robusta variety due to low input costs when compared to Arabica. These growers have endured a decade-long struggle marked by losses stemming from challenges such as erratic rainfall, crop damage inflicted by wild animals, and escalating input and labour costs.
“Till last year, we were fetching Rs 4,500 per 50 kg bag. By Jan this year, prices had surged to Rs 7,000 to Rs 8,000, contingent upon the outturn (the ratio between harvested coffee and its processed grains). I never imagined, even in my wildest dreams, that prices would reach the Rs 10,000-mark,” said G Nithin, an elated coffee planter in Chikkamagaluru who’s partially sold his stock in anticipation of further price climbs.
Nanda Belliappa, chairman of the Codagu Planters Association, established in 1870, attributed the historic surge in robusta coffee prices to the fundamental principles of supply and demand.
He noted that decreased coffee production in key robusta-producing countries like Brazil, Colombia, Vietnam, Indonesia, Honduras, and Ethiopia – due to adverse weather conditions such as drought and frost – as well as changes in cropping patterns, contributed to a windfall for Indian growers. “The increased global demand for coffee, particularly among the younger generation, has also played some small role in driving up prices,” Belliappa added.
Sources within the Coffee Board of India added that the price surge is also attributed to major robusta coffee growers like Vietnam and Indonesia transitioning to different crops such as dragon fruits and avocados, which yield higher profits compared to coffee. Additionally, they noted that coffee is experiencing increasing demand in the cosmetics industry.
In India, Karnataka, Kerala, and Tamil Nadu collectively contribute to 83% of the coffee production, with Karnataka alone accounting for 70% of the total output.
Within Karnataka, coffee cultivation is concentrated in three districts: Kodagu, Chikkamagaluru, and Hassan. Kodagu alone constitutes 60% of the production, while Chikkamagaluru and Hassan contribute to the remaining 40%.
Over the past decade, coffee plantations in Karnataka have experienced a downward trajectory, with farmers compelled to sell their land to real estate developers or convert it into tourism ventures. This shift can be attributed to diminishing returns, driven by low coffee prices and escalating input costs, which have undermined the profitability of this cash crop. The labour shortage on coffee plantations is a significant driving factor.
“There is a severe scarcity of skilled workers to tend to the estates, coupled with a steep increase in labour costs. In contrast to the Rs 50 to Rs 150 daily wage offered in the early 2000s, labourers now command Rs 500 to Rs 700 per day, depending on the complexity of the task,” explained Somaiah.
Somaiah elaborated further: “Coffee growers historically relied on local tribal communities for labour, but their population has dwindled over time. This has prompted growers to increasingly depend on migrant labourers from Bengal and Assam, largely because they bring experience from working in tea estates there.”
Planters have contended with losses inflicted by wild animals due to their proximity to forests. “While elephants & bisons stray into the estates in search of food and water, damaging the coffee plants, swarms of monkeys and giant squirrels enter the plantations and pluck the berries to suck the sweet pulp,” lamented A C Ponnappa, a planter from Kodagu, highlighting the challenges posed by wildlife.