Commodities - Brazil weather keeps coffee hot
Reuters; November 12, 1999
NEW YORK, Nov 12 (Reuters) -
Coffee prices rallied Friday on renewed concern over dry weather conditions in the coffee belt of top grower Brazil and a slump in Colombia's production, while the absence of Asian demand weakened copper.
At the New York Coffee Sugar and Cocoa Exchange, coffee futures were sharply higher in another rally sparked by the weather conditions in Brazil and a steep decline in production in the world's second largest producer Colombia.
The two factors combined with limited selling by producers to lift arabica coffee futures to a five-month high at the opening bell. The unexpectedly strong start in New York helped spike up robusta coffee futures in London.
``There was excitement in New York over Brazil weather and the reports of Colombia's crop which fuelled everything. London got dragged with it,'' said a trader in London.
Brazilian meteorologist Somar said on Friday the country's top three coffee producing states were to see virtually no rainfall over the next five to seven days.
The crop entered its flowering period starved of soil moisture, and with a number of trees stressed or defoliated after an extended winter drought and a cold snap in August.
In Colombia, the National Coffee Growers' Federation said the country produced 741,000 60-kg bags of coffee in October, compared to 1.51 million bags in the same period a year ago.
It gave no reason for the 50.9 percent decline, but the fall comes against the backdrop of prolonged and unusually heavy rains across much of Colombia.
Authorities have blamed the La Nina weather pattern, a phenomenon that causes the cooling of ocean currents in the Pacific, for downpours battering the coffee region this year.
The federation said coffee production in the first 10 months of 1999 totalled 7.34 million bags, down 26.7 percent from 10.02 million bags in the same 1998 period.
December delivery arabica coffee rose 5.95 cents to 122.50 cents per pound.