Kraft Foods (>> Kraft Foods Inc) said on Friday it lowered prices on many of its U.S. coffees, including its flagship brand Maxwell House, citing lower green coffee costs since prices peaked last year, making it the second major U.S. roaster to lower its coffee prices this week.
The move comes three days after J.M. Smucker Co. (>> The J.M. Smucker Company) cut the cost of well-known brands Folgers and Dunkin' Donuts by an average of 6 percent. It is the second cut to coffee prices since August 2011 for both companies.
"These changes reflect sustained decreases in the cost of green coffee," Kraft spokeswoman Bridget MacConnell told Reuters in an email.
The price cuts follow several consecutive price hikes due to a prolonged rally that lifted ICE arabica coffee futures to a 34-year high above $3 per lb in May 2011. Prices have since dropped more than 40 percent and are near a 20-month low.
Effective immediately, Kraft reduced prices on Maxwell House and Yuban roast and ground coffee brands by about 6 percent, and Gevalia roast and ground sold in retail outlets by approximately 10 percent, MacConnell said.
Non-flavored instant coffees, excluding those sold under the Maxwell House International trademark, are reduced by about 4 percent, she said.
Instant coffee is traditionally processed from robusta coffee beans. Robusta futures trading on LIFFE are currently down about 16 percent from their three-year high reached in March 2011. Recently, however, the market has soared on concerns about tight supplies, climbing about 12 percent in the past two weeks to tap an 8-1/2-month high at $2,235 per metric ton (1.1023 tons) on Friday.
(Reporting By Marcy Nicholson; Editing by Bernard Orr)