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Coffee prices at a 40 year high - why?

In previous years when the coffee industry has experienced high peaks there was a good reason - frost/drought  - etc.  This time, whilst there has been a drop in production in a number of the main producing countries it does not justify an increase in the NYC by over 100% in 9 months. The majority of the increase in the coffee market can be put down to trading speculation and as we know when any commodity has a trend, it’s difficult to shake it.

The last few months trading in coffee has been extremely bullish and remains bullish until the speculators tire of buying soft commodities – this is also being further fuelled by Libya, oil, US$ and now Japan etc. There would seem no top to the market at present until it turns around and comes down again!

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