RSS
Twitter
Linked In
News In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Has the tide turned on arabica coffee supplanting robusta?

Twitter Linkedin

Indian coffee growers are bucking the trend of switching from lower-valued robusta beans to arabica production, as the price gap continues to close, and with the rust outbreak heightening the profile of disease resistance.

India's arabica coffee output will in fact grow in 2013-14, by 1.8% to 1.70m bags, contrasting with a 2.2% drop to 3.50m bags in production of robusta beans, the US Department of Agriculture bureau in New Delhi said in its first forecasts for the season.

However, this dynamic reflects the season by an "on" one in India's cycle of alternate higher and lower arabica production years, as in Brazil.

In fact, "Indian producers are gradually shifting to robusta production," the bureau said, a switch in contrast with the move in many other leading robusta-producing countries, such as Indonesia and Vietnam, where arabica is, gradually, improving in popularity.

'Higher disease resistance'

In fact, arabica area, while accounting for a little under one-half of India's coffee area in 2011-12, up down from 73% in the early 1950s, had been staging a slight comeback against robusta.

However, while robusta prices have fallen since, declining by 9.0% over the last year as measured by London futures, arabica futures, traded in New York, have tumbled by 22%, depressed by strong Brazilian production.

Furthermore, roasters, deterred from arabica beans by high prices in early 2011, have boosted demand for the cheaper robusta beans.

The USDA bureau also flagged the appeal of Indian growers of robusta trees' "higher disease resistance", with the variety resistant to the coffee rust fungus which is devastating arabica plantations in Central America, prompting huge crop losses.

Sri Lanka famously suffered a devastating rust outbreak in the 19th century which prompted farmers to switch to the tea plantations for which the country is now famous.

'Attracts a premium'

For Indian growers, robusta also offers increased yields, with robusta beans typically accounting for about one-third of the country's total coffee production, despite being grown on only a slightly bigger area than arabica beans.

Furthermore, Indian robusta "has a good reputation among international buyers", especially in Europe, attracting it higher prices which, in the arabica sphere, are generally garnered by specialist Latin American or east African beans.

"Indian robusta attracts a premium among European buyers relative to competing origins," the USDA bureau said, in a report which also flagged the growing popularity of coffee drinking domestically.

"Hundreds of Western-influenced coffee shops have emerged across India's major and second tier cities over the past decade.

"Coffee now competes against the once-dominant tea in these cafes, especially among younger consumers."

By Agrimoney.com

Twitter Linkedin
Related Stories

Evening markets: South American double whammy brings ags back down to earth

Ags lose early gains, undermined by a tumble in Brazil’s real, and falling rain in Argentina. Still, wheat futures remain in positive territory

Can cotton prices extend their rally?

History suggests futures will not stay long in the 70s cents a pound. So which way will they trend?

Morning markets: Hard wheat regains premium over soft, amid US dryness worries

Kansas City wheat outperforms, as Plains precipitation worries extend to a dearth of snow cover. But Kuala Lumpur palm oil hits a 16-month low

Evening markets: Ags gain, as funds begin to get that year-end festive mood

Ag prices recover, helped by the likes of more positive comment on US export competitiveness, and some more negative talk on Argentine rains
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069