World coffee shortage looming?

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We may have a coffee shortage in '07-'08:
LONDON -- A world coffee shortage is looming two years from now as yields from Brazilian trees dwindle and a global surplus in 2006-07 will fail to replenish stockpiles in producer countries, predicts commodity analysts F.O. Licht.

"In 2007-08, stocks could be at a critically low level," F.O. Licht managing director Helmut Ahlfeld said Thursday.

Costs have risen for producers in Brazil, the world's biggest grower and exporter of coffee, while the country's strengthening currency has hurt earnings.

The Valley runs on caffeine. Better short QQQs.


Of course, there are ready substitutes, so going long on tea, soft drinks, or Novartis (makers of NoDoz) is probably a better idea ;-)

Because coffee has a decent shelf life, one would expect the price of coffee to begin rising rather soon if this report is correct. I wonder if it will?

A coffee shortage could potentially even affect soft drink production -- on a tour of a coffee plantation in Costa Rica they explained that the caffeine left over after the decaffeination process is sold to soft drink makers to add to colas. Synthetic production may be possible, but presumably would increase costs.

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