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Jul 18, 2016 @ 2:00

Coffee gets more expensive as supply ebbs amid demand

A trucker strike has hindered coffee shipments in Colombia the past month, increasing the risk that beans will be damaged in the world’s second-largest producer, growers said. Adverse weather last month hurt arabica crops at top producer Brazil, where the robusta harvest in the main growing region will slide to the smallest in 12 years, a producers’ group estimates. Smaller harvests are also expected in top robusta supplier Vietnam, as well as Indonesia and India.

By the end of 2016-2017 season, global stockpiles will be the smallest in four years, the US Department of Agriculture projects. This includes shrinking reserves in Colombia and Vietnam while Brazil will have the equivalent of less than one month of supplies to meet domestic consumption and exports. At warehouses monitored by ICE Futures US, stockpiles have fallen 25% this year to near the lowest since April 2011.

“Prices continue to benefit from a positive demand outlook in spite of risk events in the UK and Europe that have rattled other commodities,” David Hightower, founder of Chicago-based Hightower Report, said in a note Monday. ICE’s slumping inventory ‘‘reflects a positive global demand outlook.”



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