Sector Snap: analyst looks at high coffee prices

By Debarati Roy
Dec. 17 (Bloomberg) — Coffee futures surged to a 13-year high in New York on mounting concern that global supplies will trail demand.

A shortage of high-quality arabica coffee has led to “precariousness of the supply/demand balance,” the International Coffee Organization said last week. Price also climbed on demand from funds. Futures have surged 66 percent this year, heading for the biggest annual gain since 1994.

“There is a lot of fund buying,” said Rodrigo Costa, the vice president of institutional sales at Newedge USA LLC in New York. “The fundamentals are very supportive.”

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