JDE Peet's, one of the world's largest coffee companies, will raise coffee product prices in Brazil by an average of 30% next year after a near doubling in prices this year on international commodity markets, two traders told Reuters citing documents sent to its clients.
Brazil is the world's second biggest coffee consuming nation after the United States and traders said other coffee companies will also be looking to hike prices when their long-term contracts with retailers expire.
JDE Peet's, the maker of coffee brands Jacobs, L'Or, Tassimo and Douwe Egberts, was not immediately available to comment.
World Coffee Prices
Global coffee prices soared to record highs this week and are up some 80% this year as adverse weather in Brazil and Vietnam, the world's top coffee growers, has hit the outlook for the current crop.
JDE Peet's referred to 'climate issues' in a message to clients that it would be raising prices for roast and ground, whole beans, soluble, capsules and cappuccino, according to the traders who saw the confidential document.
In the past five weeks alone, coffee prices on international commodity markets have gained some 30%.
Price Hike
"Some big roasters in Europe were already planning a 10% increase in price for end-December or early January before this recent move. Now I expect there may be further rounds of increases," said a Europe-based coffee trader.
Coffee companies, especially those that sell primarily to supermarkets, have been struggling this year to pass on rising prices as consumers are increasingly hunting for cheaper brews amid a cost of living crisis.
The boss of Nestlé, the world's biggest coffee company, was ousted earlier this year after the board grew unhappy about weak sales growth and a loss of market share due to price rises.
