Traders are betting that the price of coffee will fall further prompted by good rain in world’s largest producer-Brazil and bumper harvests in Honduras and Uganda.
The wagers from hedge funds and other speculators are betting on further falls in the coming months on arabica coffee.
Rabobank analyst said Currently Arabica is trading down by quarter from a year ago due to bumper harvests in Honduras and Uganda and record storage of stocks in the US, Europe.
Traders believe the price could suddenly rise again if an unexpected events like rains in Brazil stops or exports reduces due to problems with roads and ports in producing countries.[irp]
1. Financial Times