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Coffee prices firmed to a two-month high on continued uncertainty about the size of the crop in Brazil, the world’s largest producer of the commodity. below, do not cut & paste the article.
However, fresh concerns about the harvest next year caused by the damage to the coffee trees triggered fresh buying and ICE December coffee hit a two-month high on Monday of $1.8610 a pound on purchases by hedge funds and other financial investors. below, do not cut & paste the article.
Nevertheless, experts say that the extensive damage could extend to supply in 2015.
The price increases in arabica have meant that coffee roasters have been forced to increase their retail prices.
Companies including Starbucks, Kraft and JM Smucker, which sells coffee through its Folgers and Dunkin’ Donuts brands, have announced price increases.
The last time that arabica retail prices rose, in mid-2011, consumers shifted to products using more robusta, the lower quality bean that is cheaper than arabica.
Thanks to the bumper harvests in Vietnam, the leading robusta producer, prices did not shoot up.
However, there are worries that further demand pressures on robusta could push prices higher.
Volcafe, a leading coffee trader said that, if both arabica prices and robusta prices were to increase, consumers could react by cutting down their coffee consumption.
“We have not seen this since the 1990s,” it said.
Source: ft.com/cms/s/0/bd8b1f94-1652-11e4-93ec-00144feabdc0.html#axzz38rJUP7Ff
