Consequently, the ICO warned that the tight inventory levels has left the market “highly susceptible” to price volatility, as witnessed on Monday.
“While the coffee market seems to have no immediate supply concerns, it must be reiterated that stock levels in most producing countries are waning,” the ICO said, according to agrimoney. “”While there is a moderate buffer in importing country warehouses, this may not be sufficient to cover any significant negative shock to production. This could leave the market highly susceptible to a rapid surge in prices… if production fails to meet expectations.”
iPath Dow Jones-UBS Coffee Total Return Sub-Index ETN
For more information on the coffee market, visit our coffee category.
Max Chen contributed to this article.