Short supplies of arabica coffee “justify” price increases in recent years, said Jose Sette, the acting executive director of the International Coffee Organization. Following are comments Sette made at a United Nations commodity conference in Geneva today:
“The fundamentals are in place to justify the price increases we’ve seen,” Sette said. “The coffee market is being driven much more by fundamental supply factors than by investors. The shortage is in arabica, and arabica is going up.”
Robusta coffee “is starting to react” in response to the tight supply situation for arabica, according to Sette.
“Coffee markets are not primarily driven by financial factors. We have seen an increase in inflow of speculative funds, hedge funds over time, but it seems that the fundamentals do prevail.”
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