Coffee and other soft commodities have been volatile recently as the global financial markets turmoil started to spill over to other markets.
But fundamental factors of supply and demand remained solid, said Mario Cerutti, director of the supply chain and coffee buying department at Lavazza, the world's seventh-biggest coffee roaster by purchases of green coffee.
"Arabica has been trading in a range of $1.30-$1.50 (per lb) for months...it is likely to continue for a few months," Cerutti told Reuters in a telephone interview.
Arabica and robusta coffee futures fell to their lowest levels since December 2007 on Thursday, hit along with other commodities by the strengthened U.S. dollar.
"Robusta prices may slip slightly in the coming months, I'd say in an indicative range from $1,900 (a tonne) to $2,200 or up to $2,400. But we may see some short-term fluctuations," Cerutti said.
London's robusta benchmark November <LKDX8> settled on Thursday at $1,931 a tonne, off $33.
Strong crops expected in major coffee producing countries may push the global output in the 2008/09 marketing year "maybe a couple of million bags" above a 131 million bag forecast by the International Coffee Organisation (ICO), Cerutti said.
With demand lagging behind the output growth, the coffee market was likely to see a surplus this year, but it would go for stock building and would not drive the prices down, he said.
"I see a fairly balanced market. The surplus should be very easily absorbed, it would not weigh on the market," he said.
Cerutti said he was not worried about a deficit in the 2009/10 year -- largely expected due to a downturn in Brazil's biennial coffee cycle -- because the fall in Brazilian output was expected to be smaller than usual.
"It seems that the crops will be less cyclical than usual for the next year... Surely, it will be a year of decline (in Brazilian crops), but it seems it will not be a big one. The (coffee) plants have lots of leaves, they are very strong."
CREDIT CRUNCH SHADOW
Cerutti said there has been no immediate impact of the credit crunch on the access that coffee producers or traders have to funds, nor has he spotted any reluctance to buy forward.
"We, Lavazza, buy forward and futures contracts without any worries," he said.
But a protracted financial turmoil may hit demand, especially for costly premium coffee as price-conscious consumers would likely shift to cheaper varieties.
"One of the possible choices of consumers is to spend less on the same amount of goods: if I want to keep taking my five cups coffees a day but spend less, I will have to buy lower quality coffee," he said.
"We hope that consumers rather take four cups, but of high quality."