Is Coffee the next "Bubble"?

[marmar]

from MarketWatch:



Coffee at highest in 3 months on supply concerns
By Moming Zhou, MarketWatch


SAN FRANCISCO (MarketWatch) -- Coffee futures rose Thursday in New York trade to their highest level in more than three months on concerns that winter frost in Brazil, the world's largest producer, will cripple coffee production.

Coffee futures for July delivery gained 4.9 cents, or 3.3%, to end at $1.525 a pound on the ICE Futures U.S., the former New York Board of Trade, marking the highest closing price for a front-month coffee contract since March 13.

Global coffee demand has been outstripping production for several years, and 2008 year-end stock levels are expected to fall to the lowest in 48 years -- 12.4 million bags -- according to the U.S. Department of Agriculture. One bag contains 60 kilograms of coffee.

"There is an underlying situation of tight supply, demand," said José Sette, head of operations at the London-based International Coffee Organization. "Any supply-side shock will really have a strong effect on prices, which is why, when you get this cold frost moving into Brazil, people get nervous."

The market is concerned that frost and extremely low temperatures in Brazil, which is entering the winter season, will damage coffee trees, Sette said. "In the short term, that's what has helped this market to increase."

Brazil's year-end stocks in the 2008 season are expected to fall to 1.5 million bags, down sharply from 8.4 million bags in the previous year. The 2008 stock level is the lowest since at least 1960, the earliest year the USDA historical data are available.

Brazil's inventories "are at worrisome levels, lending itself to exposure to demand spikes or supply squeezes," said Jamie Fink at PitGuru, a futures market analysis firm. ......(more)

The complete piece is at: http://www.marketwatch.com/news/story/coffee-rises-highest-three-months/story.aspx?guid=%7BC2534B3A%2D7178%2D451F%2D8467%2DB93F98594111%7D

[readmoreoften]

1. How can coffee be a bubble? I'll drink up enough to keep the economy afloat.

Don't worry. It's cool. I got yer back, ol' globo econo.

[madrchsod]

2. tulip bulbs....i`m putting my funds in tulip bulbs

i have inside info that tulip bulbs is the next wave....

[Skink]

3. EEE GAD!

Noooooooo.:hangover:

[ThoughtCriminal]

4. I can survive on tea

But if there's ever a "ketchup bubble" we're really screwed. We might find out what our food actually tastes like.