The happy, hopeful coffee farmers of Karnataka

Coffee prices surge in Karnataka, benefiting growers like Sanketh Appaiah who invest in assets like new vehicles.

Sanketh Appaiah, a young coffee planter in a village near Madikeri in north Kodagu, is now the proud owner of a new SUV thanks to the rising prices of coffee over the past three months. The 42-year-old is happily driving his new vehicle across the hilly terrain of the small district in south Karnataka.

The soaring prices of coffee beans, driven by a global shortage in crop production, have provided a ray of hope for coffee growers in Karnataka, which is the highest coffee-growing State in India. Currently, at a 15-year high, these prices are a boon for growers who have weathered a tumultuous decade.

“I own an 8-acre Robusta coffee plantation. For the first time in 15 years, the coffee price has increased, helping me to fulfil my plan of buying a new SUV this year,” said a visibly thrilled Appaiah. Like him, many coffee planters who are experiencing good prices after a decade are investing in various assets, such as plots of land, apartments, houses, and new vehicles.

A prominent cooperative bank in Kodagu received around 800 applications in a single day for vehicle loans in April. Speaking on the condition of anonymity, the bank manager said, “We have never seen so many people applying for vehicle loans. This trend can be attributed to the increase in crop prices. At the same time, we are also noticing that farmers are repaying their loans on time this year, which is also due to the increase in coffee prices.” Karnataka contributes 71% to the total production of coffee in India, followed by Kerala at 21% and Tamil Nadu at 5%.

Abubakr Ahmad, a coffee trader in Gonikoppa in south Kodagu, says that the price of a 50-kilo bag of Robusta beans has surged to nearly ₹11,000. Robusta is the primary coffee variety grown in Kodagu. “This year marks a significant increase from the average prices seen since 2008 when the price of Robusta was between ₹3,000 and ₹4,000,” he said.

“Many coffee growers have sold their coffee, while a few, especially large-scale planters, are holding onto their produce, anticipating a further increase in prices in the days to come. However, over the last two weeks, there has been a slight drop in prices,” Ahmad added.

K.G. Jagadeesha, CEO and secretary of the Coffee Board, said a significant increase in global demand was driven primarily by low production in Brazil, the world’s leading coffee exporter. “Despite poor yields, coffee production is expected to reach 3.54 lakh tonnes, a marginal increase over last year’s production of 3.52 lakh tonnes, in India,” he said.