Brazil, Colombia and Vietnam have all estimated that the market will be left wanting after poor growing conditions in 2004 hit production.
A worldwide surge in consumption - driven by coffee bars in Europe but also by increased consumption in the developing world - has caused surplus stocks to dry up.
Trade sources said that the shortfall, expected to be 10%, will be mirrored in retail prices this month in roasted and ground, and within two months in the instant category, which represents 88% of the market. The retail price of roasted and ground coffee will rise first because it is a less processed product. Instant coffee requires far more processing, which means there is a much longer lead time from harvesting to jar.
Suppliers said supermarket buyers had been informed of the impending increases, and had not welcomed the news.
One told The Grocer: “Retail buyers with less than five years’ experience of buying coffee - and that’s nearly all of them - will never have known price rises, only decreases driven by tenders and e-auctions.”
The price of coffee on the London market was around $650/tonne in September. This week it topped $1,000/tonne, a factor that is just starting to be felt by the manufacturers.
The large manufacturers, such as Nestlé and Kraft, buy huge quantities forward, which has been delaying the effect on supermarket prices.