NZ unlikely to follow US coffee price lead

Coffee prices are going up in the United States but New Zealanders may not have to pay more for their caffeine fixes.

Three major US roasters have lifted their prices on major coffee brands such as Maxwell House and Folgers.

Kraft Foods, Massimo Zanetti and Procter & Gamble have cited gains of 70 per cent in green robusta bean prices over the last year.

All the roasters said they were responding to more than a year of price increases on the futures market.

World supply shortages have been cited for driving the London LIFFE commodity exchange, which determines green robusta prices, to US$1484 ($2265) a tonne -- well above US$966 per tonne this time last year.

But coffee buyer Zeke Alley of Cafe L'Affare said he took commodity exchange coffee prices "with a grain of salt".

The prices were largely speculative rather than supply-driven and many people buying and selling coffee contracts now were outside the coffee industry.

"People are now dealing in those contracts as financial derivatives... In fact, probably nine-tenths of the trade in these contracts are people in the derivatives market."

Cafe L'Affare itself bought beans from several different countries under forward contract, and the changing fortunes of the New Zealand dollar meant his company was quite used to prices "bouncing around".

A major coffee bean importer said he was unaware of any big price changes on the horizon.

He said robusta bean prices affected instant coffee or blends but "not the coffee that we're interested in".

Mr Alley said coffee was the second biggest traded commodity in the world after oil .

He said the big US coffee roasters tended to follow each other with price increases or falls.

The major roasters last moved their coffee prices in August last year when they were dropped by about the same amount as the latest rise.

- REUTERS