COMMODITIES : Coffee Futures Prices Fall; May Signal Ease in Supply

Coffee futures prices fell sharply Thursday, reversing a five-month trend on speculation that a tight supply situation may soon ease, analysts said.

On other markets, grains and soybeans moved lower; precious metals gained slightly; livestock and meat futures were mostly higher, and stock index futures retreated.

Coffee contracts on New York’s Coffee, Sugar & Cocoa Exchange lost as much as 2.87 cents a pound as the executive committee of the International Coffee Organzation opened a two-day meeting in London.

At that meeting, delegates from consumer nations complained of slow shipments of high-quality beans from producer nations and claimed some producer nations had sold coffee at discounted prices to non-member nations, said Sandra Kaul, an analyst in New York for Shearson Lehman Hutton.

The apparent willingness of some producers to sell coffee at a discount, along with news that Colombia had begun registering coffee for export in April, suggests an easing of supplies, Kaul said.

“This indicates that the short-term supply situation that pushed the market up so sharply is about to come to an end at the same time that seasonal demand eases,” she said.

In addition, analyst Kim Badenhop of Prudential-Bache Securities noted that coffee prices were nearing levels that could trigger a relaxation of ICO export quotas and increase shipments.

Coffee settled 2 cents to 2.87 cents lower with the contract for delivery in March at $1.3829.

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