Amadeusz Juskowiak

Coffee price fall short term dutch roasters

This mornings sharp decline in coffee prices following the breakdown late last night of negotiations in London to reintroduce International Coffee Organization ICO quotas will be shortlived Dutch roasters said

The fall is a technical and emotional reaction to the failure to agree on reintroduction of ICO export quotas but it will not be long before reality reasserts itself and prices rise again a spokesman for one of the major Dutch roasters said

The fact is that while there are ample supplies of coffee available at present there is a shortage of quality he said

Average prices fell to around 110 cents a lb following the news of the breakdown but we expect them to move back again to around 120 cents within a few weeks the roaster added

Dutch Coffee Roasters Association secretary Jan de Vries said although the roasters were disappointed at the failure of consumer and producer ICO representatives to agree on quota reintroduction it was equally important that quotas be reallocated on a more equitable basis

There is no absolute need for quotas at this moment because the market is well balanced and we must not lose this opportunity to renegotiate the coffee agreement he said

There is still a lot of work to be done on a number of clauses of the International Coffee Agreement and we would not welcome quota reintroduction until we have a complete renegotiation de Vries added

With this in mind and with Dutch roasters claiming to have fairly good forward cover the buying strategy for the foreseeable future would probably be to buy coffee on a handtomouth basis and on a sliding scale when market prices were below 120 cents a lb roasters said

Reuter