Commodities : Monday, Dec. 2, 1985 : Coffee Prices Hit 5-Year High

Coffee prices surged Monday on the Coffee, Sugar & Cocoa Exchange, extending an eight-week rally and pushing prices to their highest levels in five years.

The rally, which began Oct. 1, has been based primarily on concern about drought-related damage to the crop in Brazil, which produces one third of the world’s coffee.

Analysts said rumors have been running rampant on the exchange floor as the market tries to assess the extent of the damage in Brazil, which produced about 30 million 132-pound bags of coffee last year.

Estimates for the coming crop vary from 14 million to 17 million bags, said Sandy Kaul, a coffee analyst in New York with Shearson Lehman Brothers.

Some reports discussed Monday said 70% of the crop was destroyed. “I wouldn’t put any credence in any reports that come out before the first or second week in January,” because it’s difficult to gauge the crop until the cherries start to form on the trees at that time, she said.