The Hindu Business Line : Global coffee prices look up

DESPITE the market over-supply situation, coffee prices rallied during the month of October and continued into November, marking a break in the downward trend in the coffee market of the past three years and reinforcing the upturn in September.

The monthly average of the ICO composite indicator price reached 50.79 US cents per pound in October compared to 47.96 cents the previous month and 42.79 cents in August.

The price rise seems to be linked essentially to the long dry spell in Brazil and expectations by the investment funds that coffee prices potentially could follow a path similar to certain other commodities, according to International Coffee Organisation (ICO).

Supply factors continued to affect movements in the coffee market.

Global availability of crop during 2002-03 is estimated at 159.8 million bags (of which production an estimated 119 million bags and the rest stocks), as compared with 150.7 million bags in 2001-02.

For a vast majority of countries, coffee crop year begins in October.

During 2001-02 (October-September) world coffee export totalled 87.99 million bags, down 1.94 per cent from 89.73 million bags in 2000-01. Estimates put world consumption at the end of September 2002 at 108.3 million bags.

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