The Italy-based illycafe is the single largest buyer of gourmet Plantation A (Arabica) beans from India. illycafe director Anna Illy says that the current economic crisis will not have much of an impact on a premium product like illy espresso. "At the most, there could be a dip in the growth-rate," she says.
Adds agronomist Alessio Colussi, head of illycafe's green coffee department, "In terms of Plantation A beans, India is our third our fourth biggest supplier. Last year, we sourced 27,000 bags (of 60-kg each) from India. Indian coffee beans will continue to be an important ingredient in our espresso blend. Our approval ratings for Indian beans was 20 to 30% when we started sourcing from India some 10 years ago. Today, it has improved to 70%."
illycafe's assurance should pep up the mood of India's coffee growers at a time when all commodity prices are plummeting to an extent where foreign roasters have postponed contracting for the country's new Arabica crop whose arrivals start hitting the market from the second half of November and peak in February. Coffee Exporters' Association president Ramesh Rajah says, "European roasters, who account for the bulk of India's Arabica shipments, normally start contracting for the new Arabica crop from the first week of October. This year, as a result of the continuous fall in Arabica futures prices on the terminal market in New York since mid-September when Lehman Brothers filed for bankruptcy, the foreign roasters are only making enquiries. We hope that contracting for the new crop will begin in November."
Based on the samples it receives and approves, illycafe usually starts contracting from growers in the second half of January or the first half of February. Adds Colussi, "Our prices are pegged to what the New York terminal closes at on the day the sample is approved." Despite the current downturn and volatility in Arabica futures on the New York terminal, Colussi says he expects the impact of external factors to taper off and anticipates a rising trend based on fundamentals like global supply and demand and the availability of stocks.