Coffee prices moved sharply higher on the New York Coffee and Sugar Exchange yesterday as reports circulated of weather damage to the Brazialian coffee crop.
A cold front accompanied by unusually high winds damaged trees in the coffee-growing state of parana, produces about 40 per cent of the Brazilian crop.
The unusually early cold weather could mean even more serious frosts will follow in the next months, meterologists said. It also could dash Brazil's hopes for a return to normal coffee production by 1979.
Uncertainty over the extend of the damage combined with reports that Zambia was at war with Rhodesia to trigger limit advances on the New York exchange. Coffee for immediate delivery, which is not subject to a daily trading limit, jumped 10 cents a pound to $2.90. London market prices soared by $1,003 to $6,128.50 a ton for immediate delivery.
A spokesman for the Brazialin Coffee Institute (IBC) in New York said he had been told by his superiors in Rio de Janiero that a "black forst" - a cold frong driven by high winds - had hit northern Parana form the Andes on the east. He said the extent of damage remains uncertain.
Since a severe frost struck the coffee-groiing states of Brazil in July 1975, the nation's production was cut from 25.2 million bags annually to about 6 million bags last year, triggering a five-fold increase in world prices.
The IBC recently disputed a U.S Agriculture Department estimate of the 1977-78 Brazilian crop of 17 million bags. IBC president Camillo Calazans said last week the agency expects a 13-to 13.5-million bag crop.