Government intervention sought to check cartels, say trade sources

With only a few weeks remaining for the coffee harvest to begin, a disparity in the prices of Robusta coffee in the international market and India has become a major cause for concern among growers in South India.

Though the price of coffee in India is usually based on international markets, especially the London market, a proportionate increase in the price of the produce overseas is yet to get reflected in the local market, according to trade sources.

While the price of Robusta coffee rose by about $70 a ton in the international market, the Indian market was yet to reflect the increase. According to Coffee Board data, the price of the produce (AB grade) in the international market was ₹165 a kg on October 29 but the growers here were getting only ₹140 a kg.

The trade sources contended that the likely reason for the disparity was ‘price cartelisation’ by some international buyers. Also, the number of buyers had been relatively low in India as the harvesting season here would begin only by the end of December, they added.

According to the board’s final estimates, the total coffee production in India during 2020-2021 stood at 3. 69 lakh tons, including 2.35 lakh tons of Robusta. Of this, a little more than 1.64 lakh tons were exported.

Recently, the Centre extended RoDTEP (Refund of Duties and Taxes on Exported Products) scheme to the coffee sector to boost exports. But the growers were not enthused, the sources added. Alleging that some international players were likely trying to enhance profits by not increasing the prices, the trade sources sought the Union Commerce Ministry’s intervention to stop such exploitation.

source: http://www.thehindu.com / The Hindu / Home> Business / by Staff Reporter / Kalpetta – October 30th, 2021