Agri Business

Domestic roasters juggle to maintain retail coffee price

| | Updated on: Oct 09, 2012
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Domestic roasters have been mixing high-priced Robustas with low cost Arabicas while retailing it to customers. Through this jugglery, they have maintained coffee retail price stable for the last four to five months.

Roasters are expected to take call on increasing the coffee prices after assessing the new crop, which will hit the market in December.

“Currently, we have been juggling inputs without hiking the selling price.

“By doing it, we are well within the price band to retain customers and sales,” said R. Srikanth Rao, Director, Bayar’s Coffee.

Roasters in Karnataka have also been able to absorb the sudden increase in value-added tax (VAT) rates. VAT rates were hiked recently to raise money to tackle drought in the State.

“In the last three months, VAT has gone up and other input costs at the estate level are also up. We have managed prices efficiently without passing it to the customers,” said Dhiraj Prabhu, partner Kalmane Coffee.

Price of raw Arabica coffees is down by 20 per cent and is trading around Rs 220 a kg, from a high of Rs 240-250 a kg couple of months ago.

Raw robusta prices have gone up steeply by 33 per cent and are currently trading at Rs 160-165 from a low of Rs 120 couple of months ago. Robusta parchment is trading at around Rs 220.

Robusta supply is very crucial for roasters and retailers; they use it in creation of various blends and also to make instant coffees.

Roasters are expecting a good crop this crop year (2012-2013) and are hoping that rain should not play spoil sport.

Prabhu said: “We may take a call to increase prices only after assessing the new crop. Price hike will be in the range of 10-15 per cent.”

Published on October 09, 2012

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