Coffee Break

U.S. coffee drinkers got a welcome treat last week. After Brazil cut the minimum export price to 53.8-c- a lb. (v. 87-c- last June), prices tumbled to the lowest levels in more than a year. General Foods Corp., biggest U.S. roaster, clipped 5-c- off the price of Maxwell House, pushed the wholesale price down to 97-c-. A. & P. Co. slashed its Eight O'Clock coffee from 89-c- to 79-c- a lb. Standard Brands cut 10-c- a lb. off Chase & Sanborn.

The price cuts, both by Brazil and U.S. roasters, were caused by the drop in demand; coffee imports fell almost 20% during 1954. This was partly due to high prices, partly to the growing popularity of instant coffee, which has come up from a mere drop in the cup to claim 25% of the U.S. market. Not only does brewing coffee and dehydrating it at the factory stretch the beans more than 50%, but the housewife wastes less instant coffee, thus the nation is getting far more cups per pound.

The steep tumble in coffee prices was balanced by an air of inflation in other commodity markets. Tension in the Far East touched off a wave of buying in tin, lead, zinc, rubber. Malayan tin rose 2 1/4-c- to 92-c- a lb., rubber to a new 1954-55 high of 37 1/4 a lb. Copper supplies were tighter than at any time since the scare-buying at the start of the Korean war. Reasons: a month-old strike at the big Northern Rhodesia mines, and rising European demand. Although copper prices steadied at 33-c- a lb. in the New York market. London was offering 44-c- and up. As supplies grew short, the U.S. Government refused to dip into its low stockpiles, instead banned the export of all domestic refined copper, limited copper scrap export to 12,000 tons for February and March.

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