SPECULATORS BETTING on lower coffee prices yesterday suffered large losses for the second time this month as futures prices in New York swung violently to a 12-year peak, prompting fears that roasters will need to increase retail prices soon.

High-quality Arabica coffee futures have surged more than 30 per cent in two weeks as low crops in Colombia and Central American countries earlier this year reduced supplies, draining inventories to the lowest level since mid-2002.

Ernesto Osorio, head of the London-based International Coffee Organisation, said after such a big increase retail prices would need to rise as soon as next month. “There is going to be an impact on retail prices, maybe as large as 10 per cent.”

The price of Arabica coffee for delivery in September – the benchmark – rose nearly 10 per cent yesterday to 176.5 cents per pound, the highest level since February 1998. The contract later pared gains to 167.15 cents, up 5.5 per cent.