As the price of Indian Robusta parchment soars in global markets due to supply concerns, exporters are worried that European consumers of this specialty grade parchment may shift to other origins such as Uganda and Indonesia. I’m afraid
The premium for Robusta parchment in India is now $1,100-$1,200 per ton above London terminal prices. Also, the price differential for Robusta cherries in India is higher than London terminal prices at $375-400 per ton. Typical premiums for Robusta in India are believed to be in the range of $750 to $1,000, but the current difference is slightly above normal.
“India is overpriced in the market,” said Ramesh Rajah, president of the Coffee Exporters Association, adding: “The high Robusta premium is a risk.”
Given weaker economic conditions in the West, consumers in countries such as Germany and Italy may shift their preferences to other Robusta parchments from competing origins such as Uganda, Indonesia and even Vietnam, where quality has improved. “Traditionally, Robusta parchment from Uganda and Indonesia was sold at a higher price than India’s, but as quality improved in the ’80s, the price was surpassed,” he said. says Rajah.
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Indian Robusta parchment premiums are rising as this year’s production declines and the harvest is nearing its end. Parchment coffee is made by wet-grinding the fully ripe fruit and drying it in the sun. There has been hesitation among producers to make more parchment this year as insurance premiums have fallen over the past two years.
Additionally, producers who expect prices to rise further are less keen to sell their produce. Most of the Robusta parchment is held by large producers who are in no hurry to sell. The few commercial firms with commitments are forced to cover, resulting in premiums skyrocketing.
Decrease in shipments
“You have to get a premium, and it has to be justifiable. A $750 to $1,000 premium is a justifiable premium for Robusta parchment. I don’t think it will go below $1,000,” he said.
India’s coffee exports for the calendar year to 2 March were 67,560 tonnes, down about 3.4% from 69,965 tonnes in the same period last year, below last year’s level.
Shipments of Robusta parchment during the period decreased 34% to 3,058 tonnes from 4,666 tonnes in the same period last year. Shipments of robusta cherries fell by about a tenth to 31,038 tons (34,841 tons).
Arabica parchment shipments were 8,326 tonnes (7,942 tonnes in the same period last year) and Arabica cherry exports were down 45% to 1,487 tonnes (2,695 tonnes). Exports of instant coffee he reached 23,560 tons (19,736 tons) by increasing domestic shipments and re-exports.