Coffee prices jumped to a 12-year high at the end of July as inventories fell for the 20th straight month, and could rise even further it is claimed. As Bloomberg reported recently, inventories of Arabica coffee in warehouses monitored by ICE Futures have dropped every month since November 2008, falling 54 per cent.
Based on price-chart analysis, futures may extend the rally to the highest level since August 1997, said Jim Stellakis, an independent analyst, and Robin Rosenberg, a futures and options strategist at PFG Best. “We’re really just running down existing stocks” said Kona Haque, an analyst at Macquarie Group Ltd in London.
Arabica coffee futures for September delivery rose 3.25 cents, or 1.9 per cent, to close at US$1.763 a pound on the ICE (as of July 30th). Earlier, the price had reached US$1.7875, the highest level for since February 1998.
In 2010, said Bloomberg, coffee has gained 30 per cent, the most among 19 raw materials in the Reuters/Jefferies CRB Index, and according to some analysts could rise even higher.
Coffee futures could jump as much as 13 per cent – to US$2 – Stellakis and Rosenberg said, which would be the highest level since August 1997.