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By Maytaal Angel
LONDON (Reuters) - Brazil's top coffee roasters including JDE Peet's, one of the world's biggest coffee companies, are set to hike prices domestically from early next year after adverse weather caused raw bean prices to spike.
Global prices for raw coffee soared to record highs this week and are up some 80% this year as adverse weather in Brazil and Vietnam, the world's top coffee growers, has hit the crop outlook, with consumers internationally likely to feel the pinch by as early as the end of March.
JDE Peet's, the maker of brands including Jacobs, L'Or, Tassimo and Douwe Egberts, will raise prices in Brazil by an average of 30% next year, two traders told Reuters on Wednesday citing documents sent to the company's clients.
JDE Peet's was not immediately available to comment.
Brazil is the world's second-biggest coffee-consuming nation after the United States. However, traders said multi-national coffee companies will also be looking to hike prices in other markets, many of them later this month or early next year when their long-term contracts with retailers expire.
"I think everyone will increase prices next year," said a Europe-based trader.
Another big Brazilian roaster 3 Coracoes will hike prices by 11% in January after raising them by 10% in December, while Melitta, also a big player in Brazil, hiked by 25% this month after a 'recent' 12% increase, documents sent to clients and seen by Reuters show.
RETAIL PRICES SET TO RISE
JDE Peet's referred to "climate issues" in a message to clients that said it would be raising prices for roast and ground, whole beans, soluble, capsules and cappuccino, according to the traders who saw the confidential document.
Melitta said it continues to face rising coffee costs due to the "climate situation", while 3 Coracoes, a joint venture between Brazil's Sao Miguel and Israel's Strauss cited climate, increasing demand and economic instability.
Both Brazil and Vietnam have experienced drought this year, while the climate has been erratic for the past few years.
3 Coracoes confirmed the increases. It said it had absorbed part of the rising costs, adding that the continuing increases in green coffee prices made it necessary to pass some of that on to consumers gradually.
Melitta did not return a request for comments.
In the past five weeks alone, raw coffee prices have gained some 30% on international commodity markets .
"Some big roasters in Europe were already planning a 10% increase for end-December or early January before this recent move," said a Europe-based coffee trader. He added supermarket shoppers could notice the price hikes by the end of March.