Coffee prices in Nilgiris hit record highs amid global shortage, bringing joy to growers

CHENNAI: As coffee bean prices have soared to record highs due to a drastic drop in its yield globally, the farmers in the Nilgiris are rejoicing over getting due value for their produce.

An acute supply crunch has led to procurement prices of coffee beans skyrocketing to Rs 250 per kg and above during the peak harvest season that started in November, last year. The season is now at its fag end and may get over by mid-February.

Coffee plantations are spread over the hilly regions of Kodaikanal in Dindugul, Yercaud in Salem, Valparai in Coimbatore and a large area in the Nilgiris.

The lush green coffee plantations are spread over an area of 50,000 acres, mainly in Gudalur and Pandalur taluks, and to some extent in Kotagiri in the Nilgiris district.

Other hill regions across Tamil Nadu may have a few thousand acres of coffee plantations in total.

“Last year, the prices of coffee beans produced in the Nilgiris hovered between Rs 160 to Rs 180 during the peak season. Until ten years ago, its procurement price was a meagre around Rs 20 to Rs 35 per kg. It then never went beyond Rs 40 per kg. The price rise started over the last four years from 2020- 2021, when dry coffee beans were priced at around Rs 80 per kg. In 2022-2023, the prices rose to Rs 110, then to Rs 180 in 2023-2024 and above Rs 250 in 2024-2025,” said Shaji Chelivayal, a coffee grower, who is also the president of the Federation of Small Tea Growers Association.

Farmers attributed the domestic and also overall global price rise of coffee to a drastic drop in output from Brazil, the largest producer of coffee due to heat wave conditions.

There was also a drop in coffee production in Vietnam and Tanzania, among other major coffee producers in the world. Even in the Nilgiris, coffee production dropped by up to 40 per cent this season, amidst soaring demand in European nations.

“Besides an overall drop in production of coffee beans due to unfavourable climatic conditions, several farmers have also stocked them up hoping for prices to go up further in the coming days. Rains during mid-March would be ideal for good flowering in plants. But lack of blossom showers coupled with a delayed southwest monsoon caused flowers to wither away, while intense rains thereafter affected its growth,” said H Sandesh, a coffee farmer from Gudalur.

Of the two major types of coffee plantations, ‘Arabica’, a premium variety that fetches a slightly higher price, is grown widely in Kodaikanal and ‘Robusta’ in most other hills across Tamil Nadu.

As there is an increasing demand-supply gap with prices of coffee continuing to soar, the farmers look forward to support from the government to boost further productivity.

“A majority of coffee farmers claim they do not have ‘patta’ for their lands, which hampers them from avoiding government subsidies. As the plantation is on the slopes, irrigation facilities could not be done and also dig borewells. Getting GI for coffee produced in the Nilgiris, which has a unique taste because of its fertile soil and conducive climatic conditions, would serve the purpose of promoting coffee produced in Tamil Nadu,” said Shaji Chelivayal.

Of the approximately 25,000 tonnes of coffee produced annually in the Nilgiris, almost 70 per cent is exported to countries like Germany, Japan, and the United Kingdom.

Not so cheerful for consumers

Consumers have begun to feel the pinch as coffee prices continue to soar.

Several coffee shops have increased their price owing to a rise in the cost of coffee powders.

At Kaappi 2.0, a popular chain of retail shops in Coimbatore, a cup of coffee that costs Rs 25 has been increased to Rs 30 since January, this year.

They make their blend of coffee by purchasing coffee beans and grinding them into powder.

However, R Ponnusamy, president of Coimbatore District Bakery Owners Welfare Association and managing director of Mahalakshmi Dairy and Aroma Bakery, said, the members of their association have so far not increased the price of coffee.

“But other shops may have increased. The increase in the price of coffee powder has become a burden as already the bakeries are reeling under trouble due to heavy property tax and hiked power tariff. Yet, we are left with no other way and continue to serve the beverage without hiking a price rise anytime now,” he said.

The price of coffee powders has gone up by around Rs 100 per kg in recent months.

“Despite the price rise, it’s our most loved beverage and cannot be stopped from consumption. Yet our family has started to restrict intake of coffee and instead switched over to tea at times,” said R Kalpana, a resident of Singanallur in Coimbatore.

COFFEE BYTES

50,000 acres plus is the area spread of coffee plantations in the Nilgiris

25,000 tonnes of coffee is produced annually in the hills

70% of the produce is exported to countries like Germany, Japan and the United Kingdom

40% drop in coffee production was witnessed in the Nilgiris

Rs 250 and above per kilogram is the increase in the price of dry coffee beans this season

Rs 20 to 35 per kg was the price of coffee beans a decade ago

Rs 110 per kg was the price of beans in the year 2022-2023 and Rs 160-180 per kg in the year 2023-2024

Rs 5 is the cost per cup of coffee in several shops

Demand soared as production was hit in Brazil due to un-favourable climatic conditions

Peak season for coffee harvest is from November to mid-February

Growers have demanded Geographical Indication (GI) for coffee grown in the Nilgiris