26 October 1999
Soft commodity forecasts poor
PRICES for soft commodities will remain depressed for the next two years as production outstrips demand in most sectors, according to the Economist Intelligence Unit (EIU).
Wheat and sugar prices have risen from their historic lows of the past two years, but their gains will be offset by continued weakness in coffee, cocoa and oilseeds.
The EIU expects coffee prices to fall to their lowest for decades over the next two seasons with robusta particularly hard hit.
Cocoa prices are expected to fall by 26% by 2001, after losing a third of their value this year.
Among oilseeds, the palm oil market is expected to continue the slide that has seen prices drop 36% this year.
Soyabean oil prices are set to improve on the back of a smaller-than-expected US harvest.
Falling stocks have improved the prospects for wheat and sugar prices.