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THE REGION GETS A COFFEE BREAK WITH CAVEATS.

Article Excerpt
The coffee crisis of 2001-2002 (see NotiCen, 2002-08-01) and beyond appears to have abated in Central America as world prices have at least doubled over the past couple of years. The benefit to Central America comes in large measure from the kind of coffee grown in this region, Arabica. It is this higher grade of coffee that has seen remarkable recovery as world tastes and the commercial strategies that shape them favor the region's product. The common Robusta coffee bean, the one sold in the mass market, has not fared well during the same period. Higher prices in Central America, however, have not benefited the growers who suffered most during the crisis. The market has consolidated and changed, and many of those least able to compete have been forced from the field.

Technical market

While flushing out the less efficient producers has contributed to the boon for the more efficient, it is not even certain that these stronger players will continue to see increases. Prices at this time are, according to analysts, driven by the technical aspects of the market, rather than the fundamentals. That means traders are more interested in the patterns of price fluctuation than in how much coffee there is. Speculators have been...

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