Dearer cups of coffee on the way
FEARS that cups of coffee could become more expensive grew yesterday after bean prices soared to a fresh seven-year high.
The price of robusta beans, used to make instant coffee, jumped 3% to $1,668 a tonne for delivery in September, and 2% to $1,560 a tonne for November.
The prices were the highest for seven years and came amid dwindling global supplies and lower exports from Vietnam, the world's biggest producer of robusta coffee, where heavy rain has disrupted operations.
There is also the threat of falling production in India next year because of damage to crops by heavy rain and pests.
The price of robusta coffee has lifted around 50% in the last 12 months.
There has also been a smaller increase in the cost of the milder and more aromatic arabica coffee due to a drought in Brazil. Arabica accounts for around 65% of global production while the more caffeine-rich robusta beans make up 35%.
The price rises could lead to more expensive coffee in supermarkets and coffee shops, according to the International Coffee Organisation (ICO) in London.
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Coffee hit three-month highs and cotton rebounded after five days of losses on Tuesday, while metals copper and gold fell in range-bound trade.
The Reuters/Jefferies CRB Total Returns Index .CRBTR> -- which tracks 19 commodity futures ranging from oil to metals, cotton, coffee, grains, livestock and frozen concentrated orange juice -- rose 0.36 percent to 310.53.
But the Goldman Sachs' GSCI Total Returns .GTX> -- an index heavily reliant on oil -- rose 0.39 percent to 6,824.02.
U.S. coffee settled at its highest since May 10, bolstered by speculative buying and spread trading due to lingering worries about the tight supply of robusta beans.
Benchmark arabica coffee for December KCZ6> on the New York Board of Trade (NYBOT) rose 1.65 cents to settle at $1.1260 a lb, after trading from $1.0970 to $1.1290.
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