Three major U.S. roasters this week hiked prices on well-known roast and ground coffee brands, including Maxwell House and Folgers, citing a steady rise in green arabica bean prices.
Procter & Gamble, the largest U.S. roaster, set the trend on Wednesday when it raised its suggested retail price for Folgers roast and ground coffee by 4 percent, or up 10 cents per 11.5-ounce and 13-ounce equivalent small-sized canister.
The company also increased its Folgers gourmet selections by 20 cents per 11.5-ounce equivalent, a 5 percent increase, with the increases effective immediately.
"This price move is reflecting the sustained green coffee price increase for arabica beans on the New York arabica 'C' market," P&G spokesman Lars Atorf had said.
Arabica coffee futures contracts are traded on the New York Board of Trade, and the "C" market, also called the "C" contract, is the spot month contract.
Spot-month March coffee contract closed up 1.40 cents per pound to $1.25 on Thursday, with roasters buying on the session's lows following P&G's price hike announced the previous day.
Since September 18, 2006, the settling price for NYBOT's coffee spot month has increased 25 percent from $0.9920 per pound to $1.2500 on December 28, near an 18-month high dating back to April 29, 2005, when it closed at $1.2515 per ton.
Brazil is the world's largest coffee producer and is expected to produce a significantly smaller crop in 2007-08 compared to 2006-07, creating concerns of tight supplies.
Massimo Zanetti Beverage USA, the U.S. unit of the privately held Italian company Massimo Zanetti Beverage Group, raised the list prices it charges retailers for many of its coffee brands early on Thursday morning.
The price increase was effective immediately, and included a 10 cent hike on 10.5- to 13-ounce equivalent cans of Hills Brothers, Chock full o'Nuts, MJB and Chase & Sanborn, company spokesman Brian Kubicki said.
Zanetti also boosted the list price of the 12-ounce equivalent bag of premium coffee Chock full o'Nuts New York Classics by 20 cents.
Later in the afternoon, Kraft Foods Inc., the largest packaged food company in North America, announced its list price increase on some of its Maxwell House and Yuban coffees, also immediately in effect.
Kraft raised the cost of 11- to 13-ounce cans of Maxwell House and Yuban coffees by 10 cents, a Kraft spokesperson said.
This brings the list or suggested retail price for a 13-ounce can of Maxwell House coffee to $2.66 from $2.56.
None of the companies increased the price for instant coffee.
All three companies lifted prices on various coffee brands in October 2006, citing gains of 70 percent in green robusta prices over the last year. Robusta beans are typically used to make instant coffee or are blended with ground arabica beans to make a more affordable brewed coffee.