The weaker U.S. dollar isn’t just bolstering gold, silver and oil prices. It’s also giving a wake-up call to coffee prices and the coffee exchange traded note (ETN).
Coffee prices just got a little bolder, thanks to a weaker U.S. dollar and concerns about the quality of beans coming from Brazil’s top producer after the government turned away supplies from the farmers, reports Marcy Nicholson for Reuters. The March arabica contract rose to $1.41 a pound.
Trader claim that the average price of Kenyan coffee jumped to $232.58 per 50-kg bag at Tuesday’s sale from $187.17 at the previous auction ahead of a month-long break and on low volumes, reports Reuters. The Nairobi Coffee Exchange auction, which is normally held weekly, is now carried out every two weeks because of the low quantities available for sale. (Why coffee is a hot commodity this year).
Meanwhile, India exported 16% less coffee this year, because of lowered global demand. India, the largest coffee exporter in Asia after Vietnam and Indonesia, had shipped more than 2 tons of coffee between January and November last year, according to the data by the state-owned Coffee Board, reports Press Trust of India. (What else has dampened India’s coffee harvest?)
- iPath Dow Jones AIG Coffee TR Sub-Index ETN (NYSEArca: JO): up 20.3% year-to-date
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.