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Arabica Coffee Beans Could Be Next Hot Commodity
Insiders predict that prices for arabica coffee beans could increase by more than 20 percent on the New York Board of Trade in the next 12 months. Demand for the commodity is due to Procter and Gamble Co.'s best-selling Folgers brand and Kraft Foods Inc.'s Maxwell House.
It is predicted to outperform commodities investments including copper and silver.
Coffee sellers are switching to arabica beans exchanged mostly in New York after the cheaper coffee variety robusta resulted to a seven-year high in London last month.
"Now that robusta is moving up, it's bringing other grades into play," said Raymond Keane, a coffee trader in Charleston, S.C., for Balzac Bros. and Co., which supplies the commodity for Procter & Gamble and Kraft.
Coffee in New York may reach $1.30 a pound by the middle of next year, said Michael Coleman, managing director at Singapore-based Aisling Analytics.
The predicted jump for New York coffee is similar with Macquarie Bank Ltd.'s prediction for a decline in copper, which jumped 75 percent this year reports Bloomberg.
Silver, ballooned to 46 percent, will increase only 17 percent in 2007 said Edward Ennis at Julius Baer Holding AG.
The International Coffee Organization pegs worldwide increase in coffee consumption at 2 percent to 7 million tons, complemented by growth of Seattle-based Starbucks Corp.
Estimates show that about two-thirds of global coffee comes from arabica beans that are used by coffee shops such as Starbucks. The others use robusta, e. g. instant coffee, espresso and low-cost blends. www.allheadlinenews.com
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