Major Coffee Roasters in Brazil Prepare to Raise Prices

Major coffee roasters in Brazil are preparing to increase prices following a period of unfavorable weather conditions that negatively impacted crop forecasts and led to rising costs.

According to reports from Reuters, the Dutch coffee roasting company JDE Peet’s plans to raise coffee prices in Brazil by up to 30% in 2025.

Two traders confirmed the news, referencing documents sent to the company’s clients. JDE Peet’s stated that “climate issues” are the primary reason behind the price increase, which will affect a range of products, including roasted and ground coffee, instant coffee, and capsules.

At the same time, the Brazilian roaster 3 Corações, a joint venture between São Miguel and Strauss, announced plans to raise its prices by 11% starting January 1, according to documents sent to clients and reviewed by Reuters.

The German coffee company Melitta has already raised its prices by 25% as of December 3.

All three companies cited climate-related factors as the reason for the price hikes. Additionally, 3 Corações mentioned rising demand and economic volatility as contributing factors, stating that the continuous rise in green coffee prices has forced the company to gradually transfer these costs to consumers.

In a note to analysts earlier this week, Barclays pointed out that rising prices for Arabica and Robusta could impact coffee volumes in Europe. They predicted organic sales growth of 2%, a 3.5% increase in pricing, and a 1.5% decline in volumes during the second half of the 2024 fiscal year.

For JDE Peet’s market in Latin America and Russia, Barclays forecasted even higher price increases, noting that Brazil and Russia account for approximately 85% of sales in the region.

Meanwhile, the company’s Asia-Pacific market is also under pressure due to price increases in Australia and New Zealand, which have impacted sales volumes.

This week, coffee prices reached new highs. Arabica beans, the most widely consumed variety, reached $3.34 per pound on December 10 on the Intercontinental Exchange before retreating to $3.21. Robusta beans peaked at $5,565 per metric ton at the end of November but have since fallen to $5,192.

Analyst Jon Cox commented that rising green coffee costs are forcing manufacturers to increase prices. Depending on the type of coffee, these increases are likely to reach double digits. However, such hikes could lead to lower sales volumes as consumers opt for cheaper alternatives or private-label brands.