Coffee futures prices went into a tailspin Thursday, plunging nearly 15 cents a pound on the expectation that exporting countries will begin flooding the market next week.
Prices were down mostly the 6-cent limit for daily trading at the Coffee, Sugar and Cocoa Exchange in New York. The March contract, for which there is no limit, dropped by 14.86 cents and settled at 217.94 cents a pound.
Next Tuesday, export quotas set by the International Coffee Organization will be suspended because the average price has been above $1.50 a pound for 45 market days. "The market believes the producing countries will try to export as much as possible" in the first free market they've had since 1979, said Judy Weissman, an analyst in New York with Shearson Lehman Bros.
Each member exporting country will try to ship all it can because its quota next year will be based on how much they export this year, she said.
Cotton futures prices came under intense activity on the New York Cotton Exchange.