Ed's Note: Coffee in Retrospect is a column prepared by Coffee Monitor and Poor Farmer blog to provide context for the current global coffee trade by republishing news articles from the past. In this column, we intend to reprint archived prints by converting images into electronic file formats with careful conformity to originals and, whenever applicable and possible, we provide links to the sources of the information. Meanwhile, responsibility for the contents lies solely with the authors and the views expressed in the articles do not necessarily reflect our opinions.
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Expert Doubts Coffee
Prices Will Decline
Feb 8, 1954
WASHINGTON, DC -
A New York expert told Senate investigators yesterday there is no hope for a
dip in coffee prices as long as the demand stays normal.
Leon Israel, vice
president of the New York Coffee and Sugar Exchange, gave that appraisal to a
Senate Banking subcommittee when it opened a public inquiry into price boosts that
have pushed coffee beyond a dollar a pound in some grocery stores and 15 cents
a cup in many cages.
The subcommittee
didn't nail down yesterday the reasons why coffee has shot up in recent weeks.
Israel ruled out
speculation as a factor but said the fact that Brazil has different rates for
exchanging American dollars for Brazilian cruzeiros has something to do with
it.
DENY SHORTAGE
Both Israel and
Gustavo Lobo, president of the Coffee and Sugar Exchange, insisted there is
enough coffee now to meet demand and this "no shortage." But Israel
added that "every bit of coffee in Brazil" may have been put on the
market by the time the 1953 crop year ends next July.
The subcommittee
chairman, Sen. Beall (R-Md), got out of a statement after the hearing saying
that "two general misconceptions have apparently been cleared up" by
the first day's testimony.
"Statements
in the last few weeks have given the impression that there is a shortage of
coffee, and that this shortage was created by a severe drought in Brazil last
summer."
Sen. Bush
(R-Conn) said he thought a uniform exchange rate would cut in half the price at
which Brazil sells coffee in the American market. He said the existence of
varying rates "is probably responsible for 25 to 30 cents in this
market."
"Is that a
fair statement?" he asked Israel.
"No,"
the witness replied.
The differential,
Israel said, is responsible for "some" of the recent upturn in coffee
prices, but:
"I don't
know that you can say it is responsible for 25 to 30 cents or 10 cents a
pound."
BOYCOTT THREATENS
Prices have gone
up to an extent that talk of a coffee-drinking boycott has made some headway
around the country. And coffee producing nations are worried.
The Columbian
ambassador to the United States, Edauardo Zuleta Angel, when to the State
Department yesterday to tell Under Secretary Walter Bedell Smith a boycott
would hurt sales of American products in Latin America.