**Cocoa Prices Drop, But Coffee Costs Remain Uncertain**
Coffee prices have recently softened, but consumers shouldn’t expect immediate relief as uncertainty looms over the market. Praveen Jaipuriar, CEO of CCL Products (India) Ltd, which specializes in instant coffee, noted that while global coffee prices have decreased, mixed market feedback and potential frost-related disruptions in Brazil’s coffee crop keep the industry in a cautious stance. CCL has raised prices for its coffee brands and bulk supplies by approximately 30-35% on average in FY25, reflecting the ongoing challenges in sourcing green coffee beans from major producing regions.
Jaipuriar expressed that while stabilization of coffee prices is possible, it remains uncertain for this year. He highlighted that demand has not significantly declined, but lower prices could have spurred greater demand in developing economies where coffee consumption is growing.
The prices of Arabica and Robusta beans have been fluctuating since the start of 2025. Arabica prices are currently about 45-50% higher than last year, although they are beginning to stabilize. In contrast, Robusta has seen a modest year-on-year decline of around 4%, despite recent strength in futures prices.
Matt Chitharanjan, CEO and co-founder of Blue Tokai Coffee Roasters, emphasized that the specialty coffee sector is less affected by recent price drops, as they secure their coffee during the harvest season, locking in rates from December to March. Blue Tokai has already purchased inventory for the upcoming year. Chitharanjan mentioned that if lower prices persist until the next harvest, they may be able to reduce prices, but they do not anticipate further increases at this time. The company raised retail packet prices by 10-20% in July and made a small increase in café prices in April, noting that they have absorbed a significant portion of the 60% price increase seen since January.
Despite being primarily a tea-drinking nation, coffee consumption in India is on the rise, both domestically and internationally. The increase in global coffee prices directly impacts local roasters and retailers. Recently, Nestlé India indicated that coffee prices are expected to remain stable at current low levels, as the upcoming Vietnamese crop appears to be normal. Tata Consumer Products Ltd also reported double-digit growth in its coffee portfolio (Nescafé) during the June quarter.
In conclusion, while cocoa prices have decreased, the coffee market remains in a state of flux, with various factors influencing pricing and demand. The outlook for coffee prices will depend on future harvests and market conditions.
**FAQ**
**Q: Why are coffee prices not decreasing despite lower cocoa prices?**
A: Coffee prices remain uncertain due to mixed market feedback and potential climatic disruptions, leading to cautious pricing strategies among producers and retailers.
