Low coffee stockpiles support prices

This week we can observe strong increases in coffee prices. Currently, the price of coffee is at its highest level since September 2011 and prospects indicate that this trend may continue. Data released at the beginning of this week showed a sharp drop in certified coffee inventories to just around 1 million bags. This is much less than 1% of global annual consumption. Coffee which is available for delivery under futures contracts is currently located in ports and tracked by ICE. Any delivery problems could cause astronomical price increases. Interestingly, coffee stockpiles are declining, even though a lot of Brazilian coffee has also been certified since last year.

Coffee prices broke out of the triangle formation, the range of which is close to 280 cents per pound. The area around 280-330 is marked with historic highs, althogh price of coffee has never been able to stay in this zone for extended period of time. Now, however, the supply situation is dramatic, and prices are also supported by stroger Brazilian real. Source: xStation5