Posted: 16 December 2010 0928 hrs
SINGAPORE - Enjoying your cup of coffee at a
neighbourhood store could cost more in the coming months, with
prices of some brews going up by some 15 per cent.
Ya Kun Kaya Toast, which runs 37 outlets islandwide, will increase
prices by 20 cents this month.
The chain last increased prices in February 2008 and described its
latest price revision as "inevitable". "Operating costs and raw
materials costs have been steadily increasing," said a Ya Kun
spokesperson in response to MediaCorp's queries.
Meanwhile, chain-operator Killiney Kopitiam said raw material costs
- including sugar and coffee powder - have seen "a significant
increase of 60 per cent and above". But Killiney, which has 26
outlets, has no plans to raise coffee prices just yet.
High-end cafes Starbucks and Spinelli, too, are also keeping close
tabs on soaring commodity prices, while maintaining their prices
for now.
Global coffee bean prices rose sharply last month with the monthly
average of a composite indicator hitting 173.90 US cents (S$2.2866)
per pound compared to 161.56 US cents in October, according to the
International Coffee Organisation (ICO).
"This November monthly average was the highest recorded since May
1997," the ICO added in its monthly report.
Industry observers expect bean prices to continue rising in the
coming months. They cited adverse weather conditions that have
affected harvests in Indonesia, Vietnam, Colombia and some Central
American countries.
Locally, rising utilities, rental and manpower costs have hit
smaller retailers hard, said chairman of the Kheng Keow Coffee
Merchants Restaurant and Bar-Owners Association Thomas Foo. He said
some members have told him they are likely to increase prices.
While the association does not set pricing guidelines for its 300
members, Mr Foo expects some to raise coffee prices by 10 to 20
cents before February's Chinese New Year.
But small retailers in heartland markets appeared wary of higher
prices for fear of driving their customers away. "Increasing by
even five cents is also troublesome as we will have to keep five
cent coins for change," said one retailer.
Toa Payoh stallholder Richard Teo makes up for the rising costs by
trying to sell more drinks. "But if our costs keep rising,
increasing prices may be the only way for us to survive," said the
46-year-old.
Coffee drinkers appeared resigned to paying more for their daily
cuppa. Insurance agent Dennis Lim might switch from drinking
premium coffee at high-end joints to cheaper alternatives if prices
go up steeply. "We don't have much choice. We need drinks to go
with our food when eating out," said the 40-year-old.
- TODAY/il
