"There is a lot of coffee available and I don't see any indication consumption is going up," said one European roaster. "We're seeing huge over production and I think prices are going down to maybe 90 cents (per pound)."

Industry members largely blamed this year's bumper crop in Brazil for the supply surplus. Top-producer Brazil produced some 35 million 60-kg bags in 1998-99 -- more more than a third of total world output this year -- bouncing back from a small 1997-98 harvest of some 24 million bags.

"I believe it will go in the 90s (90 cents to $1) because of 35 million bags in Brazil. I cannot get 35 million out of my mind," said one Honduran trader. "Although there may not be as big as a crop in Central America as lastyear and there are delays, there's still past-crop coffee to fill the gap and meantime the Brazils keep coming." Concerns Central American crops would be wiped out by Hurricane Mitch sent New York coffee prices sharply higher in early November. But prices have nearly fallen back toward levels seen before the storm amid views crop losses were not as high as initially feared and Central American losses would be offset by Colombian, and to a lesser extent, Brazilian production.

"As tragic as the hurricane was humanly, the coffee crops were not affected as much as people first thought," said a South American exporter.

"There's definitely oversupply and I think Colombia and Brazil will ship a lot of coffee in November and December." But some industry participants said low stock levels in both consuming and producing countries, delays in shipments from Central America and Mexico, and just-in-time inventory management by roasters could potentially drive world coffee prices higher.

"I think roasters areplaying a very dangerous game because you have very low inventories," said a Mexican producer. "If we have another situation like Central America it could be explosive. "I think it will go up again for one simple reason," he added. "Coffee is not flowing as well as it should and roasters and importers who are expecting coffee in December will not get it. We're going to be tight at the end of the year." In the longer term, coffee producers warned low world prices could lead to a supply shortage as farmers will have less money to take care of their crops.

"I'd say it is going to be low for six more months and then we're going to go up," said a producer from Guatemala. "There's a natural thing, we producers don't invest much in our crop when prices are low and then production declines."