The United Planters’ Association of Southern India (UPASI) has expressed concern over the declining productivity and mounting costs of coffee due to climate change, which have negated the effect of recent price increases, leaving the growers high and dry.
The association said the coffee prices were subdued for a long duration and during this phase the cost variable had increased manifold as evident from increase in the wage 23 times since 1990s against the price increase of 12-13 times in the similar period. Declining productivity of coffee plantations further compounded the issue
India’s average coffee productivity has declined from 947 kg/ha in 2000 to 814 kg/ha in 2023, with arabica witnessing an alarming drop from 815 kg/ha to 464 kg/ha. Comparatively, Brazil and Vietnam enjoy much higher yields of 1,694 kg/ha and 2,979 kg/ha, respectively.
K Mathew Abraham, president, UPASI, said India with a small share of 3.6 per cent of global production and 4.8 per cent of global export of coffee, is a price taker and the present spurt in prices was largely on account of global shortfall.
Climate bottleneck
All the major coffee producers have encountered climatic or economic bottlenecks, resulting in the widening gap between demand and supply. The crop in Brazil, the largest producer, is feared to run low as the country experienced one of its worst droughts during August and September 2024 followed by heavy rains in October that damaged the flowering of the 2025-26 crop.
Vietnam, the next biggest producer and premier supplier of robusta, too faced adverse weather conditions, which have threatened to affect the crop prospects. Geo-political tensions in Colombia, the third largest producer, have further added to market volatility in prices.
According to Abraham, in real terms, the price of arabica was 37 per cent lower than the real term prices in 1997. For robusta, the real term prices were 26 per cent lower in comparison to those in 1995. Evidently, the present price increase has more to do with inflation levels. In other words, prices have declined in real terms over the years, he said.
Labelling standards
The prices of robusta in nominal terms during 2024 had peaked at ₹388.16/kg. However, in real terms, the prices were only ₹38.27/kg, which is 26 per cent lower than the real term prices achieved in 1995 of ₹51.42/kg [in nominal terms ₹84.58/kg].
He stressed the need for labelling standards distinguishing pure coffee and coffee chicory mixture with specifications on the front side of the package as proposed by Coffee Board to enable the consumers to make an informed choice while buying coffee.
The price increase was critical in the Indian context for long-term sustainability of the coffee sector in the light of higher wages in the region coupled with low land and labour productivity, shortage of skilled labour, mounting fertiliser and other input costs, he said.
