The latest bout of volatility in the coffee market is set to linger, complicating the outlook for consumers hoping to see lower prices, according to Italian roaster Luigi Lavazza SpA.
“The market needs to have stability before it’s time to think about a reduction of prices,” Giuseppe Lavazza, chairman of the family-owned firm, said in an interview in London on Wednesday. It will take at least two strong harvests and a significant rebuilding of global inventories to ease supply constraints, making lower prices unlikely over the next two years, he added.
Arabica futures in New York posted their biggest intraday jump in 26 years on Monday but erased much of that gain in the next session. On Wednesday, prices fluctuated, indicating that volatility may prove sticky as market participants weigh expectations of a record harvest in top-grower Brazil against concerns about the impact of the El Niño weather phenomenon.
“I think we are living in a long-lasting period of instability and uncertainty,” Lavazza said. “Instability is the new constant.”
