COFFEE FUTURES HIT 2-YEAR HIGH.
Coffee futures prices jumped to the highest point in almost two years Monday on weather woes as well as worries that a strike will paralyze shipping from Colombia.
Coffee prices have not been this high since May 1995. The gain was the largest one-day jump in 10 months.
Investors fear a nationwide strike in Colombia - the world's second top coffee producer and exporter - will delay coffee shipments, said analyst Walter Spilka at Smith Barney Inc.
Hundreds of thousands of workers, including truck drivers who bring coffee to ports, were expected to protest for higher wages beginning today. Talks broke down Sunday.
Contributing to the Colombian concerns were growers who refuse to pick supplies until they receive higher prices.
Investors also worry that the Brazilian coffee crop - the largest in the world - will be about 11 percent lower than a year ago. The drop may come because coffee trees are in a cyclic lull after last year's good harvest.
Weather added to the fears, as the worst rains Bolivia has seen in 30 years were expected to move into Colombia's coffee regions.
Traders also responded to rumors that much of the coffee from Central America already has been sold before it is available, said analyst Arthur Stevenson at Prudential Securities in New York.
The International Coffee Organization warned last week that a serious coffee shortfall is looming. World demand has exceeded production since 1993 amid rising consumption, but that has been addressed up to now by dipping into storage, the industry group said.
Annual production once represented 74 percent of consumption, but dropped to 47 percent in the past year. That number is expected to fall even further if Brazil posts a 20 million bag harvest or less, as many are predicting.
The situation has caused coffee prices to soar about 50 percent in fewer than two months as roasters compete with speculators for quality stocks.
Coffee for March delivery rose 7.6 cents to $1.587 a pound on the New York Coffee, Sugar and Cocoa Exchange. May's gain was 8.45 cents and July's was 7.4 cents.
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|Publication:||Daily News (Los Angeles, CA)|
|Date:||Feb 11, 1997|
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