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12 February 2014 | Will Green
Coffee prices surged to their highest level for four months in January against a backdrop of uncertainty over the size of the upcoming crop in Brazil, the world’s biggest producer.
According to the International Coffee Organization (ICO) the price of coffee rose 3.9 per cent in January to 110.75 cents per pound following predictions the size of the Brazilian crop will fall for the second year running to a forecast of between 46.53 million and 50.15 million 60kg bags.
The expected decrease has been attributed to dry weather, a reduction in the area of production and less crop investment due to longer term falling prices.
In a report the ICO said: “This uncertainty over the 2014/15 crop, exacerbated by notably dry weather in some coffee-producing regions, has given support to coffee prices over the last month.”
The 2013/14 total global crop is estimated to be 145.8 million bags, a 0.5 per cent increase on 2012/13, with South American countries making up 45.2 per cent of production.