Coffee lovers will soon have to pay more for their favourite cuppa as roasters are seen hiking the retail prices, thereby passing off the hike in green bean cost to the consumer.
The beverage prices have been on an uptrend over the past several quarters due to shortfall in supplies from large producers such as Brazil and Vietnam on climate concerns.
Perikal M Sundar, Chairman, Indian Coffee Trade Association, said auction prices have more than doubled since the beginning of the year. Domestic prices are following the global price trend, which have been on the rise for several months now, triggered by supply concerns.
Robusta on the rise
Until a year ago, robusta prices were generally a third of arabica prices. Currently, arabiaca and robusta coffee prices are trading at the same levels. Robusta prices have been rising since the beginning of the year.
Sundar said robusta prices at the auctions have increased from ₹200 a kg to approximately ₹420 as of now, while arabica prices have moved up from ₹290 a kg to ₹465 for certain grades. “Roasters are increasingly finding it hard to maintain the prices and are forced to increase the selling price of the coffee powder by at least ₹100 per kg starting from this week,” said Sundar, who runs a roasting unit Modern Coffee Company in Bengaluru.
Pricing of roast and ground coffee powder depends on the composition and the chicory content. From the current levels, prices will likely go up by at least ₹100 a kg. Prices of popular roast and ground blends, which are currently hovering between ₹600 and ₹800 per kg will go up by ₹100, he said.
Trade sources said the instant coffee prices are also set to see also seen an upward revision soon.
Further, Sundar said apart from the green bean price increase, there’s very little coffee left with the growers resulting in a tight supply situation till the next crop arrives from December-January onwards.
Srikanth Rao, Director, Bayars Coffee, said they are forced to increase the retail prices as the price of raw coffee, both arabica and robusta has gone up. “We don’t see any chance of raw coffee prices coming down in the near term due to tight supply” Rao said.
Roasters cautious
“The latest price hike will be in the range of 10-15 per cent, which will be implemented over the next few days” Rao said.
While the auction prices have almost doubled since the beginning of the year, roasters have been rather cautious in raising the end product prices for the consumers.
The latest price increase will be the second such instance in the recent months. “We took a price increase in May this year,” Rao said, adding that almost every other coffee player have revised their prices upwards.
India produces around 3.5 lakh tonnes of coffee and the domestic consumption is estimated around 1 lakh tonnes, while the rest is exported, mainly to Europe.