International market sources reported that the coffee futures sank 13 percent to eight-year lows hammered by selling on news that Brazil’s key growing region was frost-free. In just under one week, the price of robusta, used mainly in instant coffee and blends, has seen itself stripped on $229 a tonne, or 22.4 percent, as fears abated of damage to crops. London’s benchmark September contract slid sharply upon opening on Monday and rapidly fell by 12.5 percent to $795 a tonne, the lowest level since September ’92. By mid-morning, September recovered slightly as bargain hunters bought at the lows, last trading at $821 a tonne, down $84. Weakness in the market prompted producer countries to agree to a coffee stock retention plan under the auspices of the ACPC. Producers agreed in may to hold back 20 percent of exportable International Coffee Organisation’s (ICO) reference price stayed below 95 cents,as reported. |
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