Goldman Sachs also anticipates greater volatility in the coffee market ahead due to Brazil’s unstable weather.
“While it is still too early to assess the full impact of the Brazil drought, this supply disruption comes on top of continued spread of the coffee leaf rust in Central America as well as expectations for a return of El Nino conditions, which historically negatively impact global production,” Goldman Sachs said in an Agrimoney article. “Given these production concerns and the potential for both the 2014-15 and 2015-16 arabica coffee supply-demand balance to be in deficit, we expect prices to remain volatile in coming months.”
iPath Dow Jones-UBS Coffee Total Return Sub-Index ETN
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