Tea, coffee and cocoa prices increase this week
Tea, coffee and cocoa prices increase this week
LONDON (AFP): Tea, coffee and cocoa prices bubbled over this week, as dealers feared supplies of our favorite pick-me-ups would slow to a trickle in the weeks ahead.
Any British dealer will tell you that to make a fine brew, you need a decent splash of water: the same is true of tea bushes themselves, which need a thorough soaking if they are to flourish.
Kenya's high plains have suffered a scorching drought of late and the green leaf tips have turned tinder dry. The east African country, which is one of the main suppliers of high grade teas to the London auction houses, has slashed supply.
Kenyan output has dried up at a time of year when two other key producer countries, India and Sri Lanka, do not normally export large quantities of tea to the overseas market.
Fears that coffee and cocoa supplies would fall short of drinkers' needs for the rest of the year also sent the price of these two tropical commodities through the roof.
Gold: brighter. Gold brightened a little, with prices gaining two to three dollars to US$353 per ounce, although market sentiment remains very subdued.
The Swiss National Bank, which last week worried investors by announcing it would sell some gold to finance a foundation for helping Holocaust victims, tried to calm them by stating that the gold sales would not begin before 1999.
The market is still nervous, however, mainly because of the prospect of a rise in U.S. interest rates and a fresh strengthening of the dollar, which would be bad for gold.
Nickel: tumble. Nickel prices dropped off the highs seen last week and fell by $100 dollars to about $8,080 per ton.
The market was put on tenter hooks by the threat of strike action at Russia's giant Norilsk plant, the biggest producer in the world, which might shut down from April 2.
Tin: float. Tin prices rose by $155 to $6,065 per ton after a fall of 420 tons in LME reserves to 9,290 tons.
Oil: rise. Oil prices rose because of technical buying, after a period of weakness. The price of Brent North Sea crude oil, which is used as a benchmark for oil prices in much of the world, gained 60 cents to $20.20 per barrel.
The markets were not influenced by a rise in US crude stocks. The rebound in prices, some analysts commented, is a reflection of strong demand.
The fact that prices have not fallen as low as some had feared in past weeks also encouraged traders to buy oil.
Rubber: stuck. Rubber prices stuck at 797.5 pounds per ton on the London market.
A study by the London-based Economist Intelligence Unit predicted that the market for car tires, the main outlet for rubber, should continue to expand at a yearly rate of two percent until 2005, mainly thanks to higher sales in emerging markets in Asia, Latin America and Eastern Europe.
Cocoa: bubbling. Cocoa prices soared to a six-month high after a wave of speculative buying sparked by fears of a crunch in supplies over coming months.
The London reference price (for delivery in May) gained almost 10 percent to 1,025 pounds per ton.
Cocoa prices have been relatively low in recent years because of the burgeoning stockpiles across the world, one analyst explained.
Coffee: boiling. Prices continued to climb in the United States, because of low stocks of high-grade arabica beans (grown in Brazil) and large-scale buying by coffee roasters.
The price of robusta, mainly produced in Asia and Africa and widely used to make instant coffee, hit $1,800 per ton mid-week in London, before slipping back to $1,650.
The rally in prices was limited by significant sales by producers.
The prospect of a fall in exports from African countries in the first half of 1997, in line with an export limitation plan drafted by the Association of Coffee Producing Countries (ACPC), supported prices.
But more fundamentally, the poor harvests expected this year in Brazil and Colombia (the world's two major producers) gave the market a lift.
Tea: strong. Tea prices have been swept away by the same fever as coffee and cocoa and have risen sharply in the London auction houses.
Medium quality brews rose to their highest level since September 1994 at 126 pence per kg, which was nine pence higher than last week.
Prices rocketed after Kenya, one of the London market's most important suppliers, suffered a dramatic fall in output.
Cotton: stretched. Speculative buying lifted cotton prices to their highest level since June 1996 at 82 cents per pound, which was two cents higher than last week on the Cotton Outlook index.
Some dealers said that the surge in soya prices had a knock-on effect on cotton, as U.S. investors put their money on a take-off in other agricultural products, including cotton.