Russia: Consumers are now trying to save money, how world prices for coffee and tea will affect the domestic market

Published May 15, 2023

Tridge summary

Consumption of tea and coffee in Georgia has decreased by 6% and 4% respectively last year due to reduced exports and oversupply in the domestic market. The decline in exports, mainly to Europe, led to a significant decrease in deliveries of both coffee and tea. Despite the low demand, prices are not falling due to the increasing cost of raw materials caused by the growth of the dollar exchange rate. The tea industry is facing challenges such as the need for importing filter paper and threads for tea bags, which are not produced in Russia and are subject to sanctions and duties. The coffee industry is struggling with high logistics costs from China and the need to import aluminum capsules, despite Russia being the largest aluminum producer. The increase in prices was further exacerbated by a drought in Brazil in the summer of 2021, which resulted in a low coffee harvest.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Last year, consumers tried to save money. Have your coffee and tea consumption also decreased? Ramaz Chanturia: The consumption of tea and coffee over the past year has decreased by 6% and 4% respectively. At the same time, an oversupply of products formed on the domestic market also because there was a serious decline in exports of both tea and coffee products. Deliveries of coffee last year fell by 40% (this is mainly instant coffee), tea - almost twice. This happened for obvious reasons: a rather large volume of finished products used to go to Europe, plus there were difficulties with logistics. No market player predicted such a drop - raw materials were purchased in the planned volume and even with a margin due to the uncertainty of the situation in 2022. When there is a lot of supply in the market and demand is low, prices are supposed to go down. But that doesn't happen. Why? Ramaz Chanturia: Certainly, downward pressure on prices is being felt. But, on the other hand, there ...

Source: RG