The coffee industry is staring at over three-decade low levels in the prices of Arabica beans as the Covid-induced lockdowns hit consumption in major consuming countries.
Arabica prices have crashed 20% to touch 96 cents per pound compared to 120 cents about six months ago. “The current prices are similar to those prevalent in the mid-1980s when the beans traded at 90 cents per pound. With Brazil pumping a record crop this year, prices will continue to be under pressure. There is not much hope on the recovery for the rest of the year,” Ramesh Rajah, president, Coffee Exporters’ Association of India told DH.
With a large part of the consuming countries going under the lockdown to fight the Covid-19 pandemic, consumption has been severely disrupted. Coffee bars and supermarkets have been shut down in Italy, Germany, Russia, and the UK among other major consuming countries.
Since Brazil, the world’s largest producer, is set to harvest a record crop (68 million bags) this year, the prices are set to remain under pressure in the coming months.
India’s coffee exports declined 17% in the first six months of 2020. Exports stood at 1,72,190 tonnes between January and June compared to 2,06,621 tonnes the corresponding period last year, according to the Coffee Board of India data. The unit value realisation was Rs 1,68,875 per tonne, a growth of 5.6% over the same period the previous year.