Key coffee growers are finding it difficult to keep up with the surge in demand, with wholesale prices this week hitting the highest level in nearly 12 years
Coffee prices are falling on global surplus expectation this season. Robusta has fallen to a 10-1/2 month low and remains under pressure on signs of ample supplies after Vietnam reported an over 13% jump in June exports. Vietnam is the world's biggest producer of Robusta coffee beans.
Country's coffee production is projected to slip by 8 per cent to 3.20 lakh tonnes in the 2016-17 marketing year due to sluggish rains, state-run Coffee Board said.
TGBL, world's second largest player in the branded tea category has entered the branded coffee space at a time when coffee consumption has started rising rapidly across India.
"This is a good year for coffee production, which is expected to be 3,80,600 tonnes. Of this, Robusta will be 1 lakh tonnes and rest will be under Arabica," Coffee Board of India Chairman Leena Nair, who was here for the 5-day India International Coffee Festival, told PTI.
The primary reason for growth in profits was superior performance in the Coffee Plantation business and in Value added products driven by the results of the company's US operating subsidiary, Eight O'Clock Coffee.
Tata Coffee expects markets of West Asia, Turkey and Iran to open up and becoming new buyers. It is also witnessing shift in dynamics of its US market business. "We are shifting much of our business from bulk to packaging currently," said Huq.
Hameed Huq of Tata Coffee told CNBC-TV18 that he expected an increase in their production of Arabica crop by 30 percent. However, he anticipated a flat growth in its Robusta crop.
CCL Products has maintained a revenue target of over Rs 400 crore this fiscal, aided by increased volumes for its processed coffee and expansion of its own branded coffee across stores in India.
Coffee prices recently underwent a 20% increase, which has led to domestic companies hiking their prices. Hameed Huq, the managing director of Tata Coffee tells CNBC-TV18 that he expects the price of coffee to remain at this level due to depleting stock levels in consuming countries.
Can't do without your daily dose of caffeine? Well get ready to shell out a lot more, says Hameed Huq, managing director, Tata Coffee. He also confirms that talks are progressing with Starbucks Corp and is in its final stages.