Coffee curbs aim to lock in 30 percent price rise<\/p>\n
LONDON (Reuter): World coffee prices are up by 30 percent from
\nthe start of 1997 and traders say they may be expected to stay
\nfirm if producing nations can implement a new accord to cut
\nexports.<\/p>\n
The rally on the price of beans hasn't yet led to many
\nincreases on retail coffee on the supermarket shelf but leading
\nroasters are keeping a close eye on a market where stocks are low
\nand short-term supply may be tight.<\/p>\n
Thursday brought confirmation that the Association of Coffee
\nProducing Countries, meeting in Brazil, had agreed to cut exports
\nby 1.3 million 60-kg bags between January and June in action to
\ntry to lock in firmer prices.<\/p>\n
Traders said the new ACPC cut, which was less than one of 2.5
\nmillion bags that had been sought by some African sellers of
\nRobusta type coffees, was constructive for coffee.<\/p>\n
"It will help the Robusta producers get better prices," said a
\ntrader with a U.S. firm.<\/p>\n
The accord is seen as likely to help narrow a wide price
\ndifferential between Robusta, grown mainly in Asia and Africa,
\nand the higher-value Arabicas that are produced chiefly in
\ncentral and south America.<\/p>\n
Altogether 1.0 million of the bags that the ACPC intends to
\ntake off the market will be Robusta coffee.<\/p>\n
"The splits have yet to be agreed, but importantly Indonesia
\nsaid that they will contribute," brokerage GNI Ltd said.
\nIndonesia has until now found it difficult to join in ACPC export
\ncurbs.<\/p>\n
But traders said that the pact could be undermined by
\nindiscipline within the group and by nations like Vietnam that do
\nnot belong.<\/p>\n
GNI disagreed. "While there will the usual derogatory comments
\nfrom Europe about whether they will stick to the accord, in our
\nopinion they will."<\/p>\n
The ACPC cut followed an emergency meeting of the 15-member
\ngroup which is led by Brazil that was called to discuss the
\nAfrican plan for a cut of 2.5 million bags.<\/p>\n
The Africans were alarmed by a slump in prices which ended
\n1996 below $1,250 per ton for London Robusta futures, compared
\nwith around $4,000 at a 1994 cyclical peak that followed frosts
\nand drought in Brazil.<\/p>\n
The new reduction comes on top of an ACPC accord in May
\ndesigned to limit members' exports in the first half of 1997 to
\nno more than 26.28 million bags.<\/p>\n
"We are delighted with the cut," Ivory Coast Commodities
\nMinister Guy-Alain Gauze told reporters.<\/p>\n
Futures prices in both London and New York, two key markets,
\nrose sharply ahead of the ACPC session.<\/p>\n
Besides the prospect of action by the producers, a cocktail of
\nfactors helped the recovery in coffee. These included low stocks
\nand a dockworkers strike in Colombia as well as talk about a
\nlower-than-expected Brazilian crop.<\/p>\n
Prices eased from the new highs on Friday after news of a
\nsettlement in the Colombia strike, and the London March Robusta
\ncontract was trading just below $1,600 per ton compared with
\n$1,630 on Thursday.<\/p>",
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