Tchibo cuts coffee prices despite stronger dollar as futures plunge
Aug 31 (Reuters) - German coffee roaster Tchibo lowered its retail prices for the first time in nearly two years on Monday, becoming the latest company to walk back recent price hikes amid tumbling green coffee prices as fears of drought in top-grower Brazil wane.
Tchibo, the fifth-largest roaster in the world according to market research firm Euromonitor, cut prices on its Feine Milde brand by 30 euro cents per pound and reduced prices on its Barista Espresso and Barista cafe crema products by one euro ($1.12) per kilo, the company said on its website.
"In recent weeks, the situation on the green coffee markets has eased," Tchibo spokesman Arnd Liedtke said in the statement. "The feared drought in Brazil - the main producing country of coffee worldwide - has failed to materialize."
Arabica coffee price on ICE Futures U.S. fell to their lowest levels in more than 1-1/2 years last week, due to Brazil's weaker real currency and sharp declines across commodity markets on the heels of a rout in global equities.
Tchibo's move came after J M Smucker Co and Kraft Heinz Co, two of the United States' largest coffee roasters and makers of the Folgers and Maxwell House brands, respectively, cut prices by six percent in July to boost flagging sales.
The two companies had raised prices in 2014 amid supply concerns due to Brazil's historic drought.
Tchibo's cut comes just six months after it raised prices as the U.S. dollar soared against the euro and other currencies, making dollar-traded commodities like coffee more expensive to end users outside the United States.
The dollar has remained strong, but the continued decline of green coffee prices throughout the second quarter ended June 31 allowed Tchibo to slash prices, the company said.
Tchibo had 12.3 percent market share in Germany in 2014, trailing only Mondelez International, and was fifth worldwide with sales of $1.9 billion and 2.3 percent market share, Euromonitor data show. ($1 = 0.8902 euros) (Reporting by Luc Cohen in New York; Editing by Chizu Nomiyama)
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