Last week coffee prices stayed within a price range, which later changed a little. The current price range is 172 – 185.5.
According to the Commodity Trading Department of , there are several reasons for the flattish price movement in advance of the harvesting campaign in Brazil:
· Experts are divided over the forecasts for the Brazilian coffee harvest. They vary from 44M bushels (the USDA) up to 58m bushels (other experts).
· There are concerns that the forthcoming winter in the Southern hemisphere will bring severe frosts (like in 1979). However, most of the coffee harvest is grown in Northern Brazil, close to the equator.
· Higher prices on “Arabica” and the global crisis have slowed down the domestic and global demand for coffee.
· More substantial coffee harvests around the globe exert extra pressure on coffee prices.
If the actual harvest marches the forecast, we may see a price decline in late May. At this point, the Brazilian coffee harvest depends on weather conditions.
Last week’s weather conditions in Brazil were favorable for ripening and early harvesting. This weekend rains are expected to delay ripening in Southern Brazil.
