PRICES: Coffee Simmers Down

Stimulating news for coffee lovers: prices are declining.

For about two years coffee drinkers have bitterly watched prices jump from $1.46 a Ib. to more than $4. A crop-killing frost in Brazil in 1975 touched off frantic bidding by buyers who feared a shortage; several coffee-producing countries aggravated the rise by increasing export taxes on the beans. Now the U.S. Department of Agriculture forecasts that Brazil, which normally grows about a third of the world's supply, will harvest about 17 million bags of beans in the crop year that begins Oct. 1—not far from double the 1976-77 crop of 9.5 million bags. In all, world production this year should increase about 14%. That would still leave output about 9% below pre-frost totals, but U.S. Agriculture Department experts are optimistic. Says one: "If we get past this growing season without a bad frost, we'll definitely be headed back toward pre-1975 production."

At the same time, responding to the high prices and consumer boycotts, U.S. coffee drinkers reduced their consumption by 17% in the past year. Slack demand and the prospect of heavy harvests have driven down futures prices on the New York Coffee and Sugar Exchange. Contracts for coffee beans to be delivered in July fell to $1.95 last week, a drop of $1.45 a Ib. since April 14.

Some A. & P. stores and other supermarkets will knock about 20¢ a Ib. off retail prices this week. But because of inflation, only those who drink much stronger stuff expect a return of those $1.46-a-lb. levels of two years ago.