Financial crisis takes coffee prices down

Font Size

Print

Feedback

Email

Discuss

Bangalore, Nov 16: Coffee prices in international markets tumbled sharply during October on the back of the financial crisis, which seems to be exerting downward pressures on virtually all commodity prices.

According to recent findings released by International Coffee Organisation (ICO), the monthly average of the ICO composite indicator price fell by 14.5% to 108.31 cent per lb in October from 126.69 cent per lb in September, recording the lowest level in 14 months. "This means that in the last two months coffee prices have declined by over 17%. On the other hand, the value of the dollar has strengthened compared to the currencies of many exporting countries, which has to some extent off-set the fall in prices," said Nestor Osorio, executive director of ICO.

Price volatility has increased marginally since September, particularly in the case of Robustas, which recorded the sharpest fall in prices for the four groups of coffee. The sale of contracts on the London futures market (LIFFE) increased by 36.4% during October compared to September.

Further, the ICO said that prices of oil products continue to be unstable, although the level in October was significantly lower than in the earlier months of 2008, particularly in July and in some countries reductions in fertiliser prices have been reported.

Exports of coffee from all exporting countries declined by 3.4% in the coffee year ended September 2008 to 94.5 million bags from 97.9 million bags exported in the previous coffee year.