COFFEE PRICES ARE LOWEST IN 17 YEARS, WITH NO SIGNS DEMAND WILL PERK UP

COFFEE PRICES ARE LOWEST IN 17 YEARS, WITH NO SIGNS DEMAND WILL PERK UP

World coffee prices are the cheapest since 1975, costing poor nations billions of dollars in lost earnings, but coffee drinkers are showing little inclination to brew more cups a day.

Farmers in Brazil, Colombia, Ivory Coast and other indebted countries are now struggling to find the cash to keep plantations going after years of support from a coffee pact created by producer and consumer nations to stabilize prices.The pact's quotas controlling exports by developing countries collapsed in 1989, swamping the world coffee market with beans and halving prices in a matter of months.

Since then prices have drifted even lower as attempts to revive the price accord have failed to make real progress.

Last week, robusta coffee, grown mainly by African and Asian countries, hovered at $840 a metric ton, down from $2,190 before 1989 and $5,435 six years ago.

In New York, milder arabica coffee from Latin America dropped to a 17- year low of 66 cents a pound, or about $1,455 a ton.

But roasters hold out little hope of lower retail prices soon.

A spokesman for Nestle PLC, which controls 50 percent of Britain's instant coffee market, said cheaper raw coffee prices would take six to eight months to filter through to supermarket shelves.

Analysts say the outlook for growers is bleak.

"There just doesn't seem to be anything at the moment that could push the market higher - the size of both consumer and producer stocks is just so great," one analyst said.

But farmers continue to harvest coffee, often their only source of income. "You need to see low prices for a long time before it affects production. It is a slow process," one trader said.

Meanwhile, coffee drinkers show little sign of brewing that extra cup each day, which could give world prices a boost.

Recent figures from commodity analysts Landell Mills show world coffee imports nudged up only 1.3 percent last year to 73 million bags of 60 kilograms (132 pounds) each.

Sales of canned coffee jumped in the fledgling Japanese market last year, but U.S. consumption was down.

Traders said the only hope of a significant recovery in prices for producers was in future growth in demand from eastern Europe or a major crop disaster. But there appears no reason to expect either in the short term.

"If the situation improves in the former Eastern bloc there is the potential for a supply shortage, but there certainly isn't one at the moment," one trader said.