Newspaper article THE JOURNAL RECORD

Supply Fears Push Coffee Futures near 20-Year Highs

Newspaper article THE JOURNAL RECORD

Supply Fears Push Coffee Futures near 20-Year Highs

Article excerpt

Coffee futures prices soared Tuesday, approaching new 20-year highs, amid speculation Colombian supplies are nearly depleted at a time when frost could threaten Brazilian crops.

On other commodity markets, platinum and palladium futures rose sharply as world supplies tightened amid a miners strike in South Africa and continued Russian shipping delays. Wheat futures fell sharply.

Coffee futures prices jumped 6.7 percent -- the biggest one-day gain since July 11, 1994, on the Coffee, Sugar and Cocoa Exchange in New York -- amid concern about dwindling supplies from Colombia and Brazil, the world's largest producers of quality arabica coffee beans. Colombia's National Coffee Growers Federation postponed its weekly policy-making meeting until June 3. The postponement prompted speculation the group could delay July exports at a time when world supplies remain tight, or may not export at all. "The question that comes to mind is whether that is a reflection of a high pace of exports or whether they do have the coffee to deliver," said analyst Stephen Platt at Dean Witter Reynolds. "There's no way of telling, and that leaves the market with a continuing source of nervousness." The Association of Coffee Producing Countries' on Tuesday also lowered estimates for this year's total Colombian crop to 10.2 million 132-pound bags, a figure some analysts say is still too high following a poor growing year. Potential freezing weather in Brazil, the world's largest producer, also supported prices. Weather over the weekend remained above frost-damaging levels, but investors refused to sell amid expectations winter in the Southern Hemisphere will produce damaging cold weather in coming weeks, Platt said. Seattle-based Starbucks Coffee Co. also announced it is considering raising coffee prices a second time this year. Starbucks is the nation's largest specialty coffee brewer, and the statement reinforced concern about tight supplies. Green, arabica coffee for July delivery rose 17. …

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