Coffee futures hit a 12-year high in Friday trading as global stockpiles of the beans fell sharply. Inventories of both robusta and Arabica beans have dropped off, leading some to believe that prices will be higher as companies replenish their supplies.
Robusta stocks have dropped 39 percent from the end of 2009 until this week, reports Bloomberg News.
On the InterContinental Exchange in New York, coffee “C” futures contracts gained 1.39 percent to around $1.75 per pound.
More support for coffee prices came from low production in Colombia, one of the world’s most important producers of premium arabica coffee beans. Indeed, some in the coffee industry think that for high-quality beans, $2.00 per pound is not out of the question by the end of the year, reports the Financial Times.
Traders looking at the technical analysis of the coffee market agree, calling coffee’s current trading patterns a “bull flag.”
“In a bull-flag pattern, the market shoots up, rests, and takes another move higher,” said Jim Stellakis of Technical Alpha, a New York-based research firm. “In an extreme case, $2 can be the target, while a close below $1.68 could slow the advance or reverse it.”
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