The coffee price spiral is easing.
For the first time since coffee prices began soaring two years ago following a major frost in Brazil, a leading producing nation has cut its export price.
Columbia took the action late Thursday, lowering its price about $35 cents a pound to $2.85 and touched off heavy liquidation of futures contracts on the New York Coffee and Sugar Exchange.
And Yesterday, the Folger Coffee Co., the nation's second largest roaster, reduced the price of its ground coffee by 30 cents to $3.68 a pound to reflect lower imported green bean prices.
Folger was the first of the major roasters to trim prices in mid-May. The company said it has reduced its wholesale list price 75 cents since May 12. The first cut, however, effectively cancelled out an earlier price increase which had not yet gone into effect.
Folger's spokesman Pat Hayes said a significant industry-wide decline had been noted in consumer coffee sales during the past several months.
Hayes said this decline was "in excess of 20 per cent" and is undoubtedly being reflected in the green coffee market.
There was no indication yesterday from the other large coffee roasters, including General Foods, if they would follow suit.
The move by Colombia followed months of controversy over the pricing policies of the exporters' association and restrictive anti-inflation policies of the government which had curbed coffee farmers' incomes to about 30 per cent of the New York market value of their beans.
Two months ago the Colombian Coffee Exporters' Association began a price protest, announcing they would not sell abroad until the government eased the two-tiered tax and escrow deposit system on coffee exports.
Their move followed a protest by the Colombian farmers, who set fire to hundreds of pounds of unroasted beans to protest the low, government fixed prices.
The Colombian price cut depressed the price of July coffee futures contracts in New york by more than 42 cents a pound on the opening of trading yesterday.
New York coffee futures prices have fallen $1.45 since their peak of $3.40 a pound on April 14.