Bloomberg News

Coffee Slumps on Brazil, Colombia Supply Forecasts

November 30, 2012

Arabica-coffee futures fell, capping the second straight monthly drop, on forecasts for higher production in Brazil, the world’s top producer, and Colombia, the second-biggest. Orange juice slid, and cocoa and cotton rose.

Brazil’s total coffee output in 2013 may reach 54 million bags, a record for the smaller crop of the biennial harvest, according to Volcafe, a unit of ED&F Man Holdings Ltd. In the year started Oct. 1, Colombian production may rise 8.5 percent to 8.3 million bags, a U.S. Department of Agriculture unit said yesterday. Futures rose 5 percent the previous three days.

“There are no supply issues, and coffee had an impressive performance” this week, Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. “The better levels probably brought some producer selling. The path of least resistance for this market is down.”

Arabica coffee for March delivery tumbled 3.7 percent to settle at $1.506 a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest drop for a most-active contract since Nov. 13. This month, the commodity dropped 2.6 percent, following an 11 percent plunge in October.

This year, coffee has tumbled 34 percent, the most among 24 raw materials in the Standard & Poor’s GSCI index.

Orange-juice futures for January delivery slid 0.7 percent to $1.2325 a pound in New York. This month, the price surged 16 percent, the most since January.

Cocoa futures for March delivery advanced 0.3 percent to $2,498 a metric ton. In November, the price gained 4.6 percent, ending a two-month slump.

Cotton futures for March delivery climbed 0.8 percent to 73.91 cents a pound. This month, the fiber jumped 5.5 percent, the first increase since August.

Raw-sugar futures for March delivery were unchanged at 19.34 cents a pound. The price declined 0.6 percent in November, following a 4.7 percent slump in October.

To contact the reporters on this story: Marvin G. Perez in New York at mperez71@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net


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