Prices of coffee, sugar to stay low: ABN Amro

Prices for agricultural commodities remain under downward pressure. At the same time, expectations for prices of coffee and sugar are being adjusted downwards. This is explained by the relative amounts of production and consumption in the markets, argue the analysts of ABN Amro. Prices for agricultural goods are being primarily affected by non-fundamental factors, suggest the analysts in their report. Average grain price is fluctuating for months around the five-year minimum. This is caused by high inventories retained by producers. Since the beginning of the year wheat prices have dropped by 11%. Corn prices have shown a four-percent fall. Coffee and coca fell by 11 and 6 percent respectively. Analysts expect that in the near future demand for cocoa and coffee will keep up with the supply, and the downward trend will end. Production of grains is expected to remain at a high level during 2015 and 2016, maintaining the prices at the current low level.