Global coffee prices rose to a near two-week high after speculators said that devastating rains in Colombia, which continue to fall, could weaken output in the world’s second largest arabica-bean producing country, reports Business Week.
Colombia’s rainy season in 2010 has killed dozens of people and affected tens of thousands, and has also harmed the nation’s coffee industry which is struggling to recover from last year’s 33-year low. Meteorologists are predicting that the rains will continue in Colombia until December.
Stockpiles of arabica beans in Colombia have fallen to their lowest levels since 2000 according to U.S. firm ICE Futures.
Arabica coffee increased by $0.0525 or 3% to $1.776 per pound, and has risen by 27% so far this year.
Despite the high prices, experts believe it is a good time to buy the beans as prices are forecast to rise even further.
“Ideas of tight supplies for mild, washed arabica and the possibility of another poor production year for Colombia and Central America still provide the reasons to buy,” said Jack Scoville, a vice president at Price Futures Group Inc.
Colombian growers are “optimistic,” however, after production rose 35% in July, signaling that last year’s period of low output has ended, Colombia’s National Federation of Coffee Growers said today in a statement.
Farmers harvested 787,000 bags in July, compared with 582,000 bags a year earlier, the group said. Exports slid to 588,000 bags from 608,000 bags. Each bag weighs 60 kilograms (132 pounds).