Coffee set to see further falls
COFFEE is heading towards 50US¢/lb, the same price it was in 1992, according to Lawrence Eagles, head of commodities research with brokers CNI.
The active futures arabica contract on New Yorks Coffee, Sugar and Cocoa Exchange is currently at $1.10/lb.
The reasons for the dismal forecast are many. This years Brazilian crop looks huge; and Eagles also reckons there is also going to be record world production. Consumption in Japan has been hit by that countrys economic malaise.
Optimists are holding out for Brazilian frosts, but Eagles points out the 1994 frost was the first in 15 years, and since the 1970s much Brazilian coffee production has moved further north, beyond serious frost threats.
On the London International Financial Futures Exchange, the September robusta future closed at $9 lower at $1,620/ tonne on very thin volumes.
- Financial Times 26/06/98 page 32 (Commodities and Agriculture)