The prices, industry sources say, have gone up due to an increase in exports.

If you haven’t yet noticed, your morning cup of coffee is now costlier. The prices of coffee beans have gone up in the past few weeks and a kilo of premium powder now costs Rs. 440 – Rs. 450.

The prices, industry sources say, have gone up due to an increase in exports. “We expect prices to touch Rs. 500/kg before coming down,” said an expert.

Raji Gopalan, a homemaker from Tambaram, said for a family consuming four kilos of coffee powder a month, the hike in price translates to an extra Rs. 200 a month.

“Though the amount may seem small, if you also take into account the price of milk, which was only revised recently, and the cost of chicory, then the real picture will emerge. A litre of full-cream, private-brand milk is priced at Rs. 44 in the city,” she said.

A kilo of coffee powder will produce decoction for 60 cups of coffee, and with a litre of milk you can make 10 cups of coffee, explained a coffee-master of a leading hotel.

R. Srinivasan, secretary, Tamil Nadu Hotels Association, said that coffee bean was a part of the forward trading market, another reason for the increase in prices. “If someone corners a bulk lot, the prices will shoot up and, once he off-loads it in the market, it will come down. The association has been urging the Central government to ban forward trading, but nothing has happened,” he said.

Hotels, however, are not considering increasing their coffee prices. T.R. Srivathsan, managing director, Only Coffee India Pvt Ltd, said they had no plans, for now, of increasing the prices.

“We will bear the increase and not pass it on to customers. We saw some additional income a few months ago when premium beans were sold at Rs. 350/kg. We will manage with that,” he said.

source: http://www.thehindu.com / The Hindu / Home> News> Cities> Chennai / by Deepa H. Ramakrishnan / Chennai – May 16th, 2014