Rus News Journal

Sharp rise in prices for coffee

Strike and a bad weather - positive factors

the Extremely favorable fundamental factors stimulating a rise in prices on robusta coffee in second half of January, have forced professional speculators to become interested in coffee again. Past Monday the price of March contracts on robusta coffee at the London commodity exchange has flied up on $108 (on 6 %) and has reached $2115 for ton.

the Present coil of a rise in prices for coffee has begun after strong frosts in Mexico which, at a rough guess, will lead to decrease in the Mexican crop of coffee on 30 - 32 % in comparison with a crop 1994/ 95 coffee years in 2 million standard bags on 60 kg. Dealers were strongly excited with this fact as in their memory consequences of last year`s natural cataclysms in Brazil which have led to crop decrease in this country on 50 % are still fresh. In this season Brazil which was the largest exporter of coffee, most likely, will be compelled even to import it for satisfaction of internal demand.
decrease in the Brazilian crop of coffee in 1995 in a combination to restriction of export from members of Association of the countries - manufacturers of coffee (Association of Coffee Producting Countries - ACPC) has led to reduction of world`s reserves to critical level. And if countries ACPC carry out the agreement on restriction of deliveries to the world market the sum of 60,4 million bags for a year (as they have agreed at the January meeting) by the end 1995/ 96 coffee years, by estimations of the American Department of agriculture, world`s reserves can appear the lowest for last 15 years - 32,33 million bags.
Among other positive factors promoting a sharp rise in prices for coffee on Monday, there was a strike of the Colombian transport workers - from - for the blocked transportations the Colombian crop of coffee has appeared inaccessible to dealers that has even more strengthened deficiency of the cash goods.
cumulative action of these factors has led finally to that professional players, in the end of 1995 deducing capitals from the market, have again become interested in the colonial goods. Inflow of investments and growth of consumer activity of speculators have caused a powerful rise in prices - for a week of the quotation of March contracts on robusta coffee have grown almost on 18 %, and, according to exchange observers, the positive tendency will amplify.