The Hindu Business Line : Upturn persists in world coffee prices

The monthly average of the International Coffee Organisation (ICO) composite indicator price was 58.69 cents a pound as compared with 52.44 cents/lb in December and 49.81 cents/lb in November 2003.

Despite rising prices, the fall in the dollar against many currencies tended to offset the advantage to some exporting countries, ICO noted adding that the situation of market fundamentals seemed to favour the uptrend in prices.

According to official Brazilian estimates, the reduced production of crop year 2003-04 will not show any significant increase in crop year 2004-05 commencing in April (around 38.5 million bags).

Latest estimate suggest total production in crop year 2003-04 would be 101.5 million bags (down one million bags from previous estimate made in December) and down from 119.74 million bags in the previous year.

World coffee consumption for calendar year 2003 is estimated at 111.5 million bags versus 109.3 million in 2002. Exports totalled 84.9 million bags in 2003 as compared with 87.3 million in the previous year, according to ICO.

The average volume of certified stocks in the New York futures market (NYBOT) was 4.42 million bags on 30 January compared to 4.37 million bags on 26 December 2003. On 6 February 2004, the volume was 4.44 million bags. The volume of certified stocks in the London futures market (LIFFE) was 2.79 million bags on 19 January 2004, an increase of 15.7 per cent compared to 22 December 2003. The volume recorded on 2 February 2004 was 2.97 million bags.

While expressing hope that price movements henceforth would be more positive than in recent years mainly as a consequence of the cutback in production in many exporting countries and the anticipated reduction in Brazilian production for crop year 2004-05, ICO warned that the crisis facing the coffee sector was far from over.