Coffee skyrockets as weather affects crops

Associated Press Modified: September 10, 2012 at 3:15 pm •  Published: September 10, 2012

The price of coffee is skyrocketing on speculation that Colombia's harvest will be smaller than expected for the fourth straight year.

Coffee for December delivery jumped 10.6 cents, or 6.5 percent, to finish at $1.7365 per pound. That's the highest level since early August.

Although Brazil's coffee crop appears headed toward a robust harvest, Colombia's crop was hampered by heavy rainfall that caused delays earlier in the season. Colombia could produce a smaller-than-expected crop for the fourth consecutive year, Barclays Capital analysts said in a report on Friday.

Other commodity prices shrugged off fresh signs of slowing economic growth in China, which is a huge importer of raw materials such as copper, oil and soybeans.

China's imports shrank unexpectedly in August, which was an indication that its economic slump is worsening. And the Chinese president warned growth could slow further, prompting expectations of possible new stimulus spending. That could help economic growth, which would benefit metals and other raw materials.

Traders also are waiting to see if the Federal Reserve will approve more measures to aid the U.S. economy at its meeting this week. The government reported weak growth in jobs in August which came on top of weakness in manufacturing.

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