"Over the last six months, the price of the green coffee has doubled on the international exchanges, and forecasts are hardly optimistic. I believe all producers in Romania will have to raise coffee prices within a month," said Eduart Berea, country manager of Tchibo Romania, the third leading player on the coffee market, with its Tchibo, Eduscho and Davidoff brands.
The rise in the coffee prices will come after a slight decline in shelf prices in Romania resulted from the lowering of the excise duties on all types of imported coffee as of January 1.
"We have already done our calculations and it remains to be seen when is the best time to raise prices. We should increase the price by some 8% in order to cover the higher raw material prices, but we are trying a smaller margin or a gradual increase," Berea said.
The price of the robusta coffee on the New York market came close to its highest level in the last five years this month, exceeding 1,200 dollars/tonne. The main reasons for the increase in the green coffee price are the rather dry weather in Vietnam, one of the most important suppliers of robusta coffee, as well as the coming of the cold season in Brazil, world''s third leading supplier.
"We have not upped prices thus far because we have been running on last year''s supplies, but we may decide to raise the price by 5-10% within a month," Eli Rachmut, the chief executive of Elite Romania, the leader of the coffee market in Romania, in his turn said.
Kraft Foods Romania, the market''s number two with Jacobs and Nova Brazilia brands does not rule out an increase in prices soon, either. "We estimate a possible increase in the average coffee price due to the pressure from the raw material price worldwide. The decision can be influenced by demand and the purchasing power of the consumers, as well as by the competitive context on the market, which is yet another significant factor that can influence the coffee price," said Doina Cavache, external relations manager of Kraft Foods Romania.
Consumption of packaged coffee in Romania is put at 100-110 million euros a year and has been going up over the last two years, after dropping in 2002. Consumption per capita, however, is much lower than the European average, with one of the reasons for this being the high excise duties. The Government committed to gradually cut excise duties on coffee so that they could be completely eliminated by 2007 in order to meet the EU requirements.
Coffee importers in Romania used to pay excise duties of 850 euros/tonne of green coffee, 1,250 euros/tonne of roasted coffee and 5,000 euros/tonne for soluble coffee until this year. The excise duties as of January 1, 2005 are as follows: 680 euros for green coffee, 1,000 euros for roasted coffee and 4,000 euros for soluble coffee. georgiana.stavarache@zf.ro
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