Analyst: Blame Emerging Markets For Price Hikes On Store-Brand Coffee

LOS ANGELES (CBS) — Even if you don’t usually shell out $4 for your morning cup o’ Joe, you may soon find your wallet a little lighter after scooping up your morning coffee.

The cost of unroasted coffee beans is on the rise, fueling an estimated 11 percent hike in wholesale prices by the company that owns the brands of Folgers and Dunkin’ Donuts.

The jump comes after Starbucks announced its own 12 percent price hikes back in March.

Michael Murphy, a commodity trading advisor with Excelsior Corporation, told KNX 1070 that third world growth is a major factor behind coffee prices.

“Coffee demand is growing two to three percent per year steadily for the last ten years, with particular growth in the producing countries,” said Murphy.

A U.S. Labor Department report shows the prices consumers paid for coffee in March jumped 3.5 percent.

Murphy attributes the surge in demand to a rapid explosion of middle-class consumers in nations like China and India, but also points to the growth of high-end coffee brands.

“People do incorporate the custom of daily coffee drinking into their lives,” said Murphy.


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