Newspaper article THE JOURNAL RECORD

Coffee Futures Hit 20-Year High as Colombia Warns of Shortage

Newspaper article THE JOURNAL RECORD

Coffee Futures Hit 20-Year High as Colombia Warns of Shortage

Article excerpt

Coffee futures prices soared to 20-year highs Thursday after a Colombian export group said the country's crop will be significantly lower than official estimates, raising the probability of world shortages by fall.

On other commodity markets, copper futures shot up on the threat of mine strikes in Chile, the world's largest producer. Soybean futures retreated.

Coffee futures jumped an average 6 percent, closing in on $3 a pound, after Gabriel Rosas, president of Colombia's National Association of Coffee Exporters, predicted the world's second- largest producer behind Brazil will harvest "a little bit under 10 million bags" of quality arabica coffee for 1997-98. It would be the second year of meager Colombian production, making it likely that roasters and consumers will see much higher prices in coming months. "Maybe we will near $3 (a pound), but I don't buy that figure," Rosas said. "But (the prices) can continue to rise, and this could last until the end of the year." The private export group's figures lent authenticity to other predictions that Colombia's total crop production, because of heavy rains, will fall to just 9.5 million bags, compared with normal production of slightly more than 13 million bags. Each bag weighs 132 pounds. Brazil also produces arabica beans, but there is uncertainty about how much that country will produce. Many coffee-producing countries have curtailed production in recent years amid sharply lower prices and were caught unawares by the shortage. "The problem is you've never had stocks as low and the potential for stocks to remain low," said analyst Judith Ganes at Merrill Lynch. "Earlier in the year, the major (producers) shipped aggressively thinking they were making money on great prices, and now there's hardly anything left to sell to ease the supply situation." The Brazilian Association of Coffee Exporters said Wednesday the 1997-98 harvest will yield 24 million bags, up from 23. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.