Nestle India, HUL raise coffee prices by 10-12%

Moneycontrol Bureau

Consumers in India already paying more for many essential commodities now need to pay more for their favourite cup of coffee. FMCG companies Nestle India and Hindustan Unilever have raised prices of their coffee brands Nescafe and Bru respectively by 10-12% over the last couple of months, according to retailers and a research report by JP Morgan.

The price hikes by FMCG companies come in the wake of a sustained rise in cost of raw materials over last several quarters. Prices of raw coffee have surged globally amid supply hiccups.

For instance, price of the most consumed Arabica variety of coffee rose 50% in a year, according to a Bloomberg report. However, coffee prices may be at their peak right now and the rally could end due to record output in Central America, the report says.

Global production of Arabica will outpace demand in 2011-12, analysts say. Netherlands based bank ABN Amro last month forecast a global Arabica surplus of 6.90 lakh 60 kg bags in season beginning October.

FMCG companies in India have been facing pressures from a spike in raw materials across the board. Nestle India