At six Joe's coffee shops across the city, detailed one-page apologias popped up last week explaining why the cost of an average cup is going up 10 to 20 cents.
At the Porto Rico Importing Co., owner Peter Longo recently raised the retail cost of a pound of coffee beans by a dollar for the second time in six months.
And at Third Rail Coffee in Greenwich Village, owner Humberto Ricardo is preparing to increase prices 5% in the next couple of weeks.
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Daniella Zalcman for The Wall Street Journal
A sign at the coffee house Joe, on 13th Street, informed customers that a price increase was coming.
"We've already been feeling the affects in the industry. Prices have already been increased for us, and we're all bracing for further increases," said Mr. Ricardo. "In a sense we're way overdue, and we need to catch up to the market because it's forecast to rise from here."
New York's coffee houses—and their customers—are feeling the brunt of spiraling prices that have been growing for more than a year and show no signs of abating. Starbucks raised prices in the fall on some of its specialty drinks, though it's holding the line on regular cups of coffee.
Experts say the reason is two-fold: A rising global demand for coffee, especially high-quality varieties, in emerging markets such as India and Brazil, plus a supply that's been diminished by some poor harvests.
Arabica coffee futures soared to their highest prices since 1997 this week. Prices have increased nearly 48% in the last six months alone.
"I don't know of anyone who has not had to raise their prices in the last 20 months," said Donald Schoenholt, president of supplier Gillies Coffee Co. in Brooklyn. "The question is, how much….We don't know where the top is yet.
"The smaller players, the specialty coffee segment, is particularly at risk. This is the roughest that I have seen it since the black frost of 1975-76," Mr. Schoenholt said, referring to frost in Brazil that devastated coffee crops.
Up until recently, most manufacturers tried to protect consumers from price increases, but the higher prices were inevitable, said Bill Patterson, a senior market analyst at Mintel International Group Ltd., a market research firm.
And while the industry was hoping Brazil's crop would stabilize the market, the coffee giant is forecast to have a small harvest of low-quality beans.
"The bean output from Brazil is likely to be lower this year," said Mr. Patterson. "So that will mean that the pressure on prices to the consumer is not going to improve any time soon."
Amanda Byron, Joe's director of coffee, said the company made the decision to raise prices last week after nearly two months of losing money; the price of its 12-ounce bags all went up by 50 cents.
She said higher-end coffee is becoming a premium product among food connoiseurs in the same way that wine did.
Mr. Longo, of Porto Rico Importing, put up laminated letters at the checkout counters of his stores and posted a notice on his website Friday after a couple of angry customers emailed him. "We have no choice but to increase our prices and we are very unhappy about it," he wrote.
Mr. Longo said the cost of unroasted beans he buys from suppliers has more than doubled.
Some customers seem to understand. Leaving with his daily afternoon coffee fix, Porto Rico customer Devin Nee, 25 years old, of Bedford-Stuyvesant, said he had noticed the increase, but "for good coffee, it's worth it. I'm addicted."
Write to Sumathi Reddy at sumathi.reddy@wsj.com
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