Coffee-drinkers were faced with the possibility of higher supermarket prices yesterday when some of the world's largest coffee-producing nations imposed a temporary ban on coffee exports in an attempt to drive the price higher.
Columbia, Costa Rica, Honduras and Nicaragua, which together account for around 25 per cent of coffee production, have imposed an export ban. However, much depends on the decision of Brazil, the largest coffee producer.
Food companies and supermarket groups said they would hold off any prices rises. Nestle, the food group that makes the Nescafe brand, said it had no plans to change any of its retail coffee prices. "We always endeavour to promote price stability and therefore do not react to green coffee bean price fluctuations in the short term," the company said.
Sainsbury's said any change in commodity prices would take some time to feed through to higher prices on the shelves.
Coffee prices have been falling sharply despite attempts by the producers to keep prices up. The key September contract fell to $2,385 per tonne on Monday, a year's low. Earlier this year the price was above $3,400 per tonne. The plunge in prices is blamed on speculators.
Nestle said speculation had started at the beginning of the Brazilian winter period. Prices were likely to continue to fluctuate due to weather currency fluctuations and political upheavals.
Columbia has convened a two-day meeting in Bogota and invited Brazil in an attempt to form a united Latin-American front. But the Brazilians said they had no plans to meet their coffee-producing counterparts.
Mexico still intends to export all its stock. Indonesia, the world's third-largest coffee producer, said it would stick by a global coffee export retention scheme despite its impact on local exporters. As a result of the scheme millions of dollars worth of coffee are being held in warehouses. Coffee-producing nations are in a long-standing battle with consumer countries over the price of the stock.