Folger, Dunkin' Donuts Coffee Prices Going Up

The cost of green – or “raw” – coffee keeps rising, and so do retail prices. The latest price hike comes from J.M. Smucker Co., which said it is raising the price of coffee sold under its Folgers and Dunkin' Donuts brands by 10 percent. That's on top of price increases last May and August.

Starbucks, which reported disappointing earnings last month, has said it is “adjusting” prices on a market-by-market basis.

Coffee prices for unroasted beans are at 13-year highs and have been rising steadily for the last two years.

The composite average price of green coffee last month was $1.97 per pound, the highest monthly figure since at least 2008, according to the International Coffee Organization. It's a 13-cent increase over December 2010.

The composite price includes Colombian Mild Arabicas, Other Mild Arabicas, Brazilian Natural Arabicas and Robustas.

Coffee production has been down slightly in recent months, partly because of bad weather, and supplies have also fallen, helping to drive prices higher. Demand, meanwhile, continues to rise, thanks to a surge in the number of coffee drinkers around the world, primarily in emerging economies.

Ironically, much of the new demand is coming from Brazil, the world's largest coffee producer. Coffee has always been a staple in Brazil but as the country's economy continues to surge, coffee consumption is rising steadily.

Brazil is expected to pass the United States as the world's largest coffee-consuming country in the near future, if it hasn't already, industry experts say. Coffee is also becoming more popular in China, as consumers there adopt more Western habits.