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Coffee: back from the brink

Tuesday, October 9, 2018

At $1.15 a pound, the price of arabica coffee is well below the $1.70 level of mid-October, 2016.

On the other hand, it’s a relief for producers, who last month saw the price of internationally traded beans reach a 12-year low of $0.96.

On a short-term basis, prices may have found a floor.

Demand from consumer countries has been weak, with no growth this year.

On the other hand, supply in the most recent harvest showed growth of only 1.6 percent.

Long-term, prospects may be even more favorable.

Last month, soft drinks giant Coca Cola Company paid close to $4 billion to acquire the Costa Coffee chain from Whitbread PLC, the largest hospitality company in the United Kingdom.

With 4,000 stores, Costa Coffee is twice the size of Starbucks in Europe.

The global coffee shop market is estimated at $165 billion.