Coffee futures shot to their highest level in nearly 13 years as nearby supplies of top-quality Arabica beans remain tight and producers scramble to acquire the beans.
Friday, coffee traded on ICE Futures U.S. for nearby September delivery hit a high of $1.8480 a pound, the strongest price since December 1997. The contract rose 4.25 cents, or 2.4%, to settle at $1.8155 a pound.
While supplies of quality Arabica beans--the kind traded on ICE--are expected to be replenished when Central America and Colombia harvest their crops in the fall, nearby supplies remain tight, forcing prices higher, said Rodrigo Costa, vice president of institutional sales at Newedge in New York.
A lack of producer selling in the lightly traded market allowed prices to climb, with traders also making purchases before the ICE delivery period against the September contract begins on Monday, said Costa.
Soaring coffee values have forced roasters to hike prices.
U.S. coffee roaster J.M. Smucker (SJM), maker of Folgers coffee, in early August raised prices by 9%, while Kraft Foods (KFT), maker of Maxwell House, increased prices more than 10%.
Coffee buyers and sellers in Brazil, the world's largest coffee producer, tread cautiously this week as local and international bean prices climb.
"Roasters are concerned about high prices and cautious about buying at such high levels," John Wolthers, a trader at coffee exporter Comexim in Santos told Dow Jones Newswires.
In Brazil--the world's No.1 coffee exporter--prices have surged in tandem with sky-high international prices on ICE Futures U.S. In Brazil's spot market, arabica coffees continued to fetch high prices thisweek. A good arabica farmgate coffee (with 16% to 18% of defects) was trading at around 330 Brazilian reals ($188) per 60-kilogram bag on Thursday, Wolthers said. This compares to around BRL230 to BRL240 a year ago.
"It's a great time to be a producer, and a difficult time to be a roaster," he said.
Roasters have been holding off from buying as coffee prices remain high, but some may need to "bite the bullet" and makes purchases.
Some buyers are fixing their coffee purchases before the September contract on ICE expires, he said.
Fernando Mellao Martini, a broker from Mellao Martini Negocios em Cafe, said high coffee prices have surprised everyone. "There's much confusion in the market," he said.
Many producers have already sold good volumes of coffee and are focusing on delivering their beans.
High-level washed coffees continue to fetch around BRL380 to BRL400 per bag, he said. But even with those high prices, some producers are wanting even higher prices, he said.
ICE Change (cents) Range
Sep $1.8155 up 4.25 $1.7740-$1.8480
Dec $1.8505 up 5.20 $1.7955-$1.8650
Friday, coffee traded on ICE Futures U.S. for nearby September delivery hit a high of $1.8480 a pound, the strongest price since December 1997. The contract rose 4.25 cents, or 2.4%, to settle at $1.8155 a pound.
While supplies of quality Arabica beans--the kind traded on ICE--are expected to be replenished when Central America and Colombia harvest their crops in the fall, nearby supplies remain tight, forcing prices higher, said Rodrigo Costa, vice president of institutional sales at Newedge in New York.
A lack of producer selling in the lightly traded market allowed prices to climb, with traders also making purchases before the ICE delivery period against the September contract begins on Monday, said Costa.
Soaring coffee values have forced roasters to hike prices.
U.S. coffee roaster J.M. Smucker (SJM), maker of Folgers coffee, in early August raised prices by 9%, while Kraft Foods (KFT), maker of Maxwell House, increased prices more than 10%.
Coffee buyers and sellers in Brazil, the world's largest coffee producer, tread cautiously this week as local and international bean prices climb.
"Roasters are concerned about high prices and cautious about buying at such high levels," John Wolthers, a trader at coffee exporter Comexim in Santos told Dow Jones Newswires.
In Brazil--the world's No.1 coffee exporter--prices have surged in tandem with sky-high international prices on ICE Futures U.S. In Brazil's spot market, arabica coffees continued to fetch high prices thisweek. A good arabica farmgate coffee (with 16% to 18% of defects) was trading at around 330 Brazilian reals ($188) per 60-kilogram bag on Thursday, Wolthers said. This compares to around BRL230 to BRL240 a year ago.
"It's a great time to be a producer, and a difficult time to be a roaster," he said.
Roasters have been holding off from buying as coffee prices remain high, but some may need to "bite the bullet" and makes purchases.
Some buyers are fixing their coffee purchases before the September contract on ICE expires, he said.
Fernando Mellao Martini, a broker from Mellao Martini Negocios em Cafe, said high coffee prices have surprised everyone. "There's much confusion in the market," he said.
Many producers have already sold good volumes of coffee and are focusing on delivering their beans.
High-level washed coffees continue to fetch around BRL380 to BRL400 per bag, he said. But even with those high prices, some producers are wanting even higher prices, he said.
ICE Change (cents) Range
Sep $1.8155 up 4.25 $1.7740-$1.8480
Dec $1.8505 up 5.20 $1.7955-$1.8650
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