J.M. Smucker raises coffee prices by 9% -- more java makers soon to follow

Before you go, we thought you'd like these...
Before you go close icon
Java just jumped at the cash register again. Due in part to a shortage of arabica beans, prices for major shelf-coffee brands such as Folgers, Dunkin' Donuts and Millstone -- all owned by J.M. Smucker Co. -- increased an average of 9% this week, Reuters reported. That's on top of a 4% bump in May. Kraft-owned Maxwell House is likely to follow.

If the soaring cost of a cup isn't making you jittery, coffee derivatives might give you a caffeine-style start. Speculators betting on rising prices are pouring into the market like milk into a double latte. Two commodity vehicles, InterncontinentalExchange and the London International Financial Futures Exchange, reported record or near-record levels of coffee futures trading. The trend has been percolating for a while. Between June 9 and 16 alone, coffee future prices soared 18.3%, according to Bloomberg data reported in Minyanville.com.

Why we are shelling out more for our daily grind traces back to Economics 101: supply and demand. A poor harvest in Central America and Vietnam has cut our supply by 8 percent, MarketWatch said. As for demand, we're jones-ing for our joe more than ever. Young adults, the fastest-growing segment, now slurp 3.2 cups per day, a National Coffee Association Study found.

All of the statistics wouldn't amount to a hill of beans except for the fact that coffee is eating into Americans' food budget at an eye-opening rate. At last check online, the price for a 33.9-ounce can of Folgers Ground Coffee Classic at Walgreens was $9.99. That was probably before the price-hike announcement.
Read Full Story

Sign up for Breaking News by AOL to get the latest breaking news alerts and updates delivered straight to your inbox.

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners