Coffee prices up to 25% due to poor harvest in Latin America

Latin America

Coffee prices have risen by about a quarter in recent weeks, responding to signs of declining production in Latin America, The Wall Street Journal reported.Futures quotes reached $ 1.17 per pound on the Intercontinental Exchange compared with $ 0.93 in mid-October. Coffee stocks in warehouses monitored by ICE fell by 78 thousand bags (1 bag is 60 kg).The main reason for this is the decline due to the extremely dry weather of the harvest in Honduras, the third largest producer of arabica in the world. Bad weather is also observed in Brazil and Peru.Experts note that there are expectations of further price increases in the market. This is indicated by the reduction on the exchange to a minimum of the number of short positions (such transactions are applied when the asset becomes cheaper), which has been going on since July.The International Coffee Organization predicts that coffee production in the 2019-2020 agricultural year will decline by 0.9% to 167 million bags (10 million tons). Including arabica harvest may fall by 2.7% – up to 96 million bags. This will be the minimum volume for the last four years.The demand for coffee in the world is expected to increase. In particular, an increase of 3% is forecast in the Asia-Pacific region in the coming year, in Europe – by 1-2%.

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