Coffee price threatened by surging output

Indian Express Newspapers (Mumbai) Ltd.

Coffee’s 42% gain during the past year may be difficult to sustain as production threatens to exceed demand, said Nestor Osorio, executive director of the International Coffee Organization.

“This is not the moment to increase production,” Mr Osorio said in an interview today at the Eastern African Fine Coffee Association conference in Arusha, Tanzania. “If production is controlled, we could keep the same level of prices.” African growers such as Angola, once the world’s fourth-biggest producer, and Tanzania want to increase harvests. Angola lost market share during the past two decades as wars and rising energy costs hurt harvests. Africa’s share of global production fell to 12% last year from 29% in 1986.

Robusta coffee for delivery in May rose $28 a metric tonne, or 2.4%, to $1,213 on London’s Liffe exchange at 11:14 AM local time. Arabica for May delivery dropped 1.9% to $1.086 a pound on the New York Board of Trade yesterday. “We are now getting at a difficult level in the sustainability of price,” Mr Osorio said yesterday.

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