In Honduras, low coffee prices are preventing growers from harvesting all of their crop because they can't afford to pay pickers or cover the cost of fertilisers.THE dramatic plunge in coffee prices has become so bad that it's threatening to claim its next victim: the specialty blends used by fancy coffee shops and discerning home brewers.
Some of the hardest hit farmers are in Central America, home to specialty varieties like the Geisha beans grown in parts of Costa Rica. There's a double whammy when futures prices fall. Since many specialty producers plant fields with beans deliverable against arabica-futures contracts, along with premium beans, it cuts into overall profits. The broad downturn for the market at a time of oversupply also erodes and sometimes even erases premiums for higher-grade coffee.
If producers do pull back, it could eventually help prices to recover as the market shifts from surplus to deficit. Some traders, such as Marex Spectron, are even hopeful that the rebound could be on its way soon.In the week ended April 9, hedge funds held an arabica net-short position of 74,110 futures and options, US Commodity Futures Trading Commission data showed on Friday.
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