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Coffee : lowest level in 7 ½ years
Coffee prices sank to the lowest level in 7 ½ years on Friday, with the outlook for another good crop in Brazil and abundant warehouse stocks available to roasters fuelling the decline. At the New York Board of Trade, coffee for May delivery closed 1.00 cents lower at 58.10 cents a pound weight pushing as low as 57.70 cents to the lowest price since June 1993.
As coffee prices have sunk, producer countries have been trying to stem the tide by holding back some of their coffee stocks in an attempt to tighten up supplies. Costa Rica said on Friday it had retained 184061 bags of coffee in the last six months, for example.
However the markets have paid little heed to the efforts given the swollen levels of stocks on hand in the consuming countries. Coffee stockpiles certified for delivery against futures in New York totalled an ample 3826872 132 lb bags as of 05 April.
Welcome rains in Brazil on Friday relieving some stress from dryness on coffee trees there also fed incentives to sell. Brazil accounts for about one third of the world's annual supply of coffee.
The lack of roaster worries about supply has been underscored this week by the absence of any speculative buying support tied to the week long strike of workers at Santa Port, Brazil's biggest shipping port for coffee.
Coffee attempts bounce
LIFFE coffee futures attempted to bounce from fresh thirty year lows on Monday, but looked set to fall further with more Asian selling to come.
"The market is so negative at the moment," said Mobashar Ahmed, Chief Analyst at futuresdata.net, "I do not think there is one person out there who will be talking the market higher in the foreseeable future."
The benchmark January coffee last traded $ 27 a tonne down at $ 572 off an earlier % % fall to $ 568 - the lowest level in just over thirty years. The next downside target was pegged at the psychological $ 550 point.
Mr Ahmed said trading and selling from top robusta producer Vietnam, coupled with trade selling, had hit the market again with little interest from roasters to stem the tide.
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