"Producers are a little worried that prices don't reflect the real situation," he said in an interview on the sidelines of the European coffee, tea & cocoa conference.

"Around 130/160 cents would be remunerative and not expensive to consumers," he said.

Most active New York December arabicas last night closed at 115.65 cents.

Lodder said prices were weakened by the impression of a huge Brazilian crop, which would help global supply in 1998/99 of 100-101 million bags to outstrip demand for the first time since 1993.

Estimates for the Brazilian crop range between 29 and 39 million bags.

But Brazilians would not totally replace Central Americans and Colombians, which were considerably tighter, Lodder said.

"There will be an imbalance in certain supply segments," he said.

Brazil's internal market might be absorbing more coffee if international prices were too low. This might be supported by the fact that Brazil was in an election year.

Brazilian coffee revenue only contributed two to three per cent to the National budget, unlike the huge importance of coffee in other Latin American economies, so sales pressures were not as acute.

Asked about the possibility of a La Nina effect in the wake of the El Nino weather phenomenon, Lodder said impact on coffee would be limited.

Heavier rains than normal might affect Indonesia, Ecuador and Peru, but "no more than five per cent of total world output," Lodder said.