Discussion:
The latest retreat in arabica coffee prices signals the tightly supplied coffee market is not running out of beans yet, but the outlook for sub-optimal harvests and faster consumption indicate that by next season it could come close. A tour of coffee areas in the world's top arabica grower, Brazil, showed a good but sub-optimal crop on the way. But in Colombia, output has dropped sharply and poor harvests have become almost a chronic problem. On the demand side, things remain tight, with stocks in the United States and Europe totaling just about a month's worth of global demand. Despite the tight market, prices of coffee futures on ICE have been hovering near a 17-month low hit on March 12. "There is a bit of supply available but you have a deficit year coming so we have to be awfully careful here and not be too bearish," said Eric Nadelberg, Senior Vice President at Jefferies Bache, LCC in New York. "There is not a lot of coffee and as we move forward this will
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Analysis: Global coffee market tight despite price slump
http://reuters.com/article/2012/03/21/us-coffee-supply-idUSBRE82K12Q20120321