Coffee prices soar in India as El Nino-induced drought impacts production in major coffee-growing areas worldwide

Subject: Geography

Sec: Eco Geo

Context:

Robusta coffee bean prices in India have surged to Rs 10,000 per 50 kg bag from the usual Rs 4,000-5,000, equalling premium Arabica prices.
Arabica is considered superior to Robusta for its creamy layer.

Reasons for Price Increase:

Global Production Drop:
- Major producers like Vietnam, Brazil, Indonesia, Columbia, Ethiopia and others have reported significant production drops due to
- Worsening drought conditions linked to El Nino have exacerbated the issue.
- Specific Drops:
  - Vietnam: Production down by 20%, worst drought in a decade, prices increased by 15%.
  - Brazil: Production was down by 15%, and costs increased by 40% in some areas.
Increased Demand:
- High demand for exports has driven up prices.
- Indian coffee’s unique taste due to shade-grown, mixed cropping patterns has boosted its demand.
Additional Factors:
- Increasing labour and input costs have contributed to the price rise.
- Losses due to human-wildlife conflicts have impacted production.

Indian Coffee Production:

Indian coffee is said to be the finest coffee grown in the shade rather than in direct sunlight anywhere in the world.
The two well-known species of coffee grown are the Arabica and Robusta.
Regions: Predominantly in Karnataka’s Kodagu (Coorg) region (70% of India’s coffee), also in Kerala and Tamil Nadu.
- Other coffee-producing regions: Non-traditional areas of Andhra Pradesh and Odisha on the eastern coast of the country and a third region comprising the states of Assam, Manipur, Meghalaya, Mizoram, Tripura, Nagaland and Arunachal Pradesh of Northeastern India.
Almost 80% of Indian coffee is exported; 70% is bound for Germany, Russia, Spain, Belgium, Slovenia, the United States, the United Kingdom, Japan, Greece, Netherlands and France. Italy accounts for 29% of the exports.

Coffee production globally:

Globally top producers: Brazil (29%), Vietnam (18%) and Indonesia (7%), Colombia, Ethiopia, Uganda, Peru and India.

Source: DTE