World output of arabica coffee will shrink 4.3% to 79.6 million bags in the current crop year, which began in October, according to the London-based International Coffee Organization.

WSJ: Trouble Brews in Colombia

India's annual coffee consumption of about 85 grams per capita is tiny compared with the 4.1 kilograms consumed in the U.S., according the International Coffee Organization, an intergovernmental group of coffee importing and exporting countries.

WSJ: India's Taste for Coffee to Affect Bean Prices

"Young people are turning to places like Starbucks because they want a trendy place to socialize and can take their iPhones and connect to the free Wi-Fi, " says Roberio Oliveira Silva, head of the London-based International Coffee Organization.

WSJ: India's Taste for Coffee to Affect Bean Prices