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Surging Coffee Prices Give New Kick To Java

Hillary Chura Associated Press

There’s a different kind of jolt coming soon to coffee lovers.

That cup of joe soon will cost more.

As prices for future delivery of beans roar toward two-year highs in commodity markets, the nation’s No. 1 seller of regular coffee - Folgers - already has said its prices will rise 7 percent next month. Others are expected to follow.

Coffee houses could increase prices 5 cents a cup by the end of summer, and grocery stores could raise prices by the end of the month unless coffee retreats from current levels in the futures market, said Ted Lingle, executive director of the Specialty Coffee Association of America.

For the 49 percent of Americans who drink coffee, the rise could change some habits.

Carlos Knoepffler, president of Miami Coffee Merchants, said roasters and merchants are hesitant to pass on higher prices because customers have gotten used to paying $4 for a pound of coffee.

“If prices go up, people might buy half a pound - not a pound,” he said.

But there are diehard coffee lovers who were not yet ready to cut back.

In downtown Tulsa, Okla., Colin Tucker, a 29-year-old lawyer, said he would curb his coffee habit when it began to cost more than lunch. Other coffee drinkers doubted an increase in coffee prices would change their habits.

Yvette Kukuk and a friend drink decaf drip coffee at a Seattle Starbucks every day.

“We just can’t do without it. We’ll just scrimp for change the days we don’t have enough money if the prices go up. We’ll just deal with it,” she said. “Yup, totally addicted.”

Knoepffler of Miami Coffee Merchants said people wouldn’t give up coffee but might think twice about indulging in gourmet brands. Sellers also will be hit, because their costs may double but they cannot double the cost of a $2.75 latte.

“If companies want to make the same profit they’ve been making, they would have to charge $5 for a cup of coffee, which is outrageous,” he said.

While government studies say consumption drops off when prices jump, Lingle of the Specialty Coffee Association said he doubted consumption would suffer even if prices do rise.

“It’s still the world’s second-cheapest beverage (after tea),” he said.

Herb Glaubman, who imports, roasts and distributes to South Florida coffee shops, said he is absorbing the price jumps - for now.

“We’re waiting to see what the major players will do before we act,” he said.

Futures prices - the cost of a pound of coffee to be delivered to a New York Sugar, Coffee and Cocoa Exchange warehouse later in the year - have increased 65 percent in the last eight weeks. Coffee for March delivery gained 8.3 cents Wednesday to close at $1.7185 a pound.

On Tuesday, Folgers announced it would raise the price of its 13-ounce canned coffee by 15 cents to $2.41, next month. A few small- and medium-sized roasters already have said their prices will increase.

The makers of Maxwell House declined comment Wednesday, and Nestle, another top U.S. coffee seller, did not immediately return a telephone call seeking comment. Starbucks said it did not plan to raise prices now, but it would reevaluate if prices continue to soar.

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