Coffee prices to increase

The outlook for coffee is not any good this year either, which the consumers in Serbia are sure to feel, as price increases in the upcoming months are inevitable. The year started with a growth of 10-20% in prices of coffee beans. A modest yield in Brazil and Vietnam, the biggest global producers of coffee, has already reflected on the prices in the global market, and the dearth of coffee will once again lead to price increases.

Coffee from the new harvest, from international markets, arrived to Serbia in the first days of 2017, which had a direct impact on the price of this product in Serbia. Experts claim that an increase in excise taxes due to adjustments to the retail price increase in 2016 and the strengthening of the US currency (the official trade currency in global stock exchanges) of 10% relative to the dinar additionally made things more difficult for coffee producers, which were forced to adjust retail prices after more than two years.

– In early 2017, Grand Kafa increased its exit price by 10%, the minimal amount possible considering the price trends in the global market – Andrej Bele, Managing Director of the Strategic Business Unit Coffee at the Atlantic Group, says for Novosti.

– The disturbance was caused by insufficient production of robusta, and the price of raw coffee is therefore nearly 50% higher compared to the same period of the last year. Robusta is the biggest culprit, but a similar increase was recorded with arabica as well, which culminated in January. Brazil, which otherwise uses robusta exclusively, had to compensate for the lack of 10 million sacks in its own production by using rio minas, an arabica sort.

According to him, the deficit of robusta was recorded in all regions, from India, through Vietnam, Indonesia, to Africa. This is why coffee roasters used arabica to make up for insufficient amounts of robusta.

– There's currently scrambling in the market to even find and secure the necessary amounts of coffee, which, along with the shifts in the value of the dollar only increases the demand and stimulates further growth of coffee prices in the market – Bele points out.

– We've amortized the costs of the global coffee price increase as much as possible by planned procurement and using our own reserves and we will continue striving for our prices to be in line with the optimal relation between the quality and price competitiveness.

The constantly increasing dollar will also impact the global prices. The fact that the dollar will continue to grow is shown by an increase of reference rate by FED from 0.75% in February to 1% in March. The interest rates are expected to grow several times more by the end of the year, which will lead to an even stronger dollar.

Atlantic Grand doo Beograd

Atlantic Brands doo Beograd

Grand Kafa

Atlantic Group

price of coffee

increase in price of coffee

coffee producers

coffee excise taxes

Andrej Bele

robusta

arabica

rio minas

US Federal Reserve System

FED