Italy hunts for mouldy coffee beans
further pressure on an already tight market this month, with prices
expected to continue rising.
Sacks of Robusta coffee beans stored at warehouses in the Italian Port of Trieste were still being held this week, as investigators tried to work out how much of the stock had gone mouldy.
The Euronext stock exchange has suspended all trading on the coffee beans at Trieste, reportedly making up around 26,000 tonnes, until a full survey of stocks has been completed.
Coffee prices have risen significantly over the last couple of months, according to the International Coffee Organisation, and the ongoing problems in Trieste increase the chance of high prices continuing into September.
Robusta coffee supplies are used as a benchmark for calculating coffee price futures, and are one of four groups of coffee alongside Columbian Milds, Other Milds and Brazilian Naturals.
The beans in Trieste are thought to have been damaged by excess moisture on transport pallets getting into the coffee sacks, Euronext said.
Bags of Robusta coffee will be dumped if they contain more than five mouldy beans or 10 partially mouldy beans per 500g.
Euronext was confident some sacks would survive, however.
"The Exchange anticipates that a significant number of suspended Lots are likely to be found to be undamaged or capable of being re-plied to form new Lots from the sound bags."
The problem for the market is how quickly this can happen. Euronext said the unaffected Robusta beans were unlikely to impact stock levels in September.
That means there is good chance of Robusta coffee prices remaining high in the near future.
"Robusta prices have been rising sharply since the end of July," said Nestor Osorio, executive director of the International Coffee Organisation (ICO). "On 2 August the Robusta indicator passed the 70 US cents/lb mark, reaching its highest level since 8 December 1999."
The ICO warned that high prices suggested supplies of Robusta, which come mainly from Vietnam, Indonesia and Brazil, were running short.
Vietnam is expected to increase output after the upcoming harvest, although this may be offset by declines in Indonesia and possibly Brazil, the ICO said. Brazil has already harvested half of this year's coffee crop and is estimated to have enough for 40m bags from that.
The estimate puts the country on course to produce less than last year's 106m bags from its total coffee crop, which in itself was a 6.5 per cent drop on the year before.