Thursday, September 25, 2008

Coffee Exception to Commodities Weakness

While most commodities have been plunging in price, coffee has remained strong, and has grown in August's producer price index basket by 12.6 percent on a month-to-month basis.

According to the International Coffee Organization, the jump in August prices was significantly influenced by the hurricanes' impact om coffee plantations in important Caribbean areas.

The ICO added that coffee is primarily moving on supply-and-demand factors, and speculation plays little role in the existing price moves.

In other coffee news Brazil should end up with a record crop this year, although it's not clear at this time whether that will result in higher exports, as Brazilian demand for coffee is high internally.

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