NEW YORK -- Coffee prices are expected to remain extremely high and volatile at least until this fall, according to securities analysts who track the commodity.
A combination of short supply, increased demand, floods in Central America and approaching winter weather in Brazil and other coffee-growing countries has played havoc with coffee futures prices since January. As a result, the nation's leading roasters have instituted price hikes.
Mark Polsky, senior vice president at Magruder, Rockville, Md., said his chain has been raising coffee prices, but not as much as some of his competitors because he took advantage of buys when prices were lower.
At the Coffee, Sugar and Cocoa Exchange here, the price of a pound of coffee has skyrocketed from about $1 a pound in early January to a high of $3.18 a pound May 29. It has since dropped to the $2.50 range, but is expected to be volatile for the rest of the summer, analysts said.
Judy Ganes, an analyst with Merrill Lynch here, said she doesn't expect prices to level off until the new crop arrives this fall.