Arabica coffee futures for September rose by as much as 10 percent to $1.765 per pound in New York trading, the highest level since 1998, reported BusinessWeek/Bloomberg. By mid-afternoon the price had retreated somewhat and held steady at $1.683 per pound by 2:30pm.
Much of the increase was driven by speculation that coffee buyers will continue to add to their stocks as demand for both varieties of bean – arabica and robusta – has remained consistently strong.
The price of Robusta coffee futures rose as well, at one point increasing by over 7 percent to $1,694 per metric ton for September delivery.
This week’s high exceeds the one set in trading last week, when fears about shortages and supply dominated trading patterns. Pessimism set in after the high, pushing coffee down again. However, it appears that the bean’s previous gains may have been more solid than many thought.
Kona Haque, an analyst at a London investment bank, told BusinessWeek that “less high-quality arabica is available for export after two consecutive poor harvests in Central America and Colombia and rain damage to harvesting in Brazil last year.”
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