Coffee lovers, brace yourselves. Your daily dose of caffeine is about to get a bit pricier. The surge in global coffee prices, driven by climate change impacts, supply chain disruptions, and shortages in major producing countries like Brazil and Vietnam, is now hitting consumers in India. Raw coffee prices in the country have skyrocketed, reaching a record high of over ₹27,500 for a 50 kg bag of premium Arabica parchment beans. The Robusta parchment prices are also on the rise, hovering around ₹23,600 per bag.
**The Impact on Consumers**
Perikal M Sundar, Chairman of the Indian Coffee Trade Association (ICTA), noted that auction prices have more than doubled since early 2024, with Arabica parchment prices climbing by ₹160 to ₹660 per kg in just the past month. Sundar, who also operates a roasting unit called Modern Coffee in Bengaluru, predicts that the prices of premium roast and ground blends will soon surpass the ₹1,000 per kg mark. Currently, these blends are priced between ₹880-900 per kg, after a ₹100 per kg increase in October last year.
Sundar revealed that a trade meeting is on the horizon to determine the extent of the upcoming price hike. Additionally, the ICTA plans to approach the government to request duties on coffee exports to support domestic businesses. With over two-thirds of the country’s coffee production being exported, such measures are deemed necessary for the survival of local coffee enterprises.
**Expert Insights and Industry Response**
Praveen Jaipuriar, CEO of CCL Products (India) Ltd, highlighted the volatility in global green coffee prices, attributing the rise to supply concerns in Vietnam. He mentioned that Indian coffee prices are currently at historic highs, prompting adjustments in pricing strategies for their B2C vertical, which includes their own brand. Jaipuriar stated that prices for large packs have been increased 2-3 times in the past year, while efforts are being made to keep prices stable for Low Unit Packs (LUPs).
During a recent investor call, Suresh Narayanan, Chairman and Managing Director of Nestle India, expressed concerns about the steep inflation in coffee prices. He emphasized that if coffee prices continue to surge, companies may have to implement price adjustments to offset the rising costs. Narayanan underscored the challenges posed by such inflationary pressures on businesses, signaling the need for strategic responses to maintain profitability in the face of escalating coffee prices.
As coffee enthusiasts grapple with the prospect of higher prices for their beloved brew, the industry is navigating a complex landscape of global supply chain disruptions and climate-induced challenges. While the aroma of freshly brewed coffee remains a daily comfort for many, the economic realities of the coffee market are evolving rapidly, prompting stakeholders to consider innovative solutions to address the mounting pressures on the industry.
