At least three U.S. roasters have confirmed price increases since the Arabica coffee futures peaked at a 34 year high last week.
Kraft foods Inc., one of the leading coffee roasters in the United States, has increased its prices from March 16, by 22 percent, which is its fourth largest price rise in a year.
Other coffee brands that followed the upward trend include Massimo Zanetti Beverages USA, which owns Chock Full o’ Nuts and Starbucks packaged coffee—increased its prices by an average of 12 percent.
The cause of soaring coffee prices has been due to demand not keeping up with supply. Recent agricultural market research produced by agribusiness bank, Rabobank, last Friday suggested that Arabica coffee—which is considered to be superior quality beans—has not seen such price increases since the 1970s.
Arabica is predominantly grown in Latin America and the preferred choice for specialty coffees, and is normally used by Starbucks Corp. Robusta, normally produced in Asia and various areas in Africa, is a less valued type of coffee, and likely to be used in instant coffee and expresso beverages.
Popular Campos Coffee wholesaler, Will Young from Sydney, Australia, in an interview with the Sydney Morning Herald, said that the recent poor weather conditions in the world’s leading bean-growing regions, along with the spike in demand for coffee in countries including Japan and China, has contributed towards raw bean prices soaring.
On the other hand, Nespresso Chief Executive Officer, Richard Girardot has predicted that coffee prices will fall because speculation has fueled prices excessively.
