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Coffee Futures Reach 11-Year High

May 15, 1997|From Reuters

Coffee futures closed at their highest price in 11 years Wednesday as speculators and panicky commercial coffee firms continued to buy on worries about tight supplies now and later this year.

At the Coffee Sugar and Cocoa Exchange in New York, coffee for May delivery rose to a new life-of-contract high of 270.00 cents a pound and closed up half a cent at 261.50 cents, the highest closing price since March 1986.

"It was just a profit-taking day," said Stephen Smith, president of South Futures in Miami. "But the trend is clearly up, and people are very scared to sell it."

Smaller-than-expected crops in many Latin American countries--notably No. 2 coffee producer Colombia--and low inventory levels in consuming countries have helped fuel the five-month upswing.

According to official figures made available Wednesday by Colombia's National Coffee Growers' Federation, the country produced 2.7 million bags of coffee between January and April, compared with 3.7 million in the same period last year. (Each bag contains 132 pounds of coffee.)

The figures came a day after Jorge Cardenas, the federation's general manager, told reporters that the federation was having "enormous difficulties" meeting its export commitments because of unusually tight supplies.

The onset of winter in Brazil, the world's top coffee grower, is also keeping traders on edge. A frost in Brazil three years ago sent prices soaring.

Smith said traders will closely watch a monthly stocks report from the Green Coffee Assn. of New York that is due today. Many traders expect the report to show that U.S. stockpiles of coffee rose by 100,000 bags in April. But estimates range widely from a slight decrease to a 300,000-bag increase.

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