Coffee futures slumped to the lowest price in more than two years on signs that supply will outweigh demand due to a bumper crop in Brazil, the world’s largest grower and exporter.
In the year that started Oct. 1, world production is estimated at 144.5 million bags, a 7.3 percent increase from a year earlier, according to the London-based International Coffee Organization. Brazil’s 2013 output may reach 50.2 million bags, even as trees enter the lower-yielding half of a two-year cycle, compared to the 2012 record of 50.8 million, the country’s Agriculture Ministry said.
“This Brazil crop is going to be a monster,” Joe Scaduto, a coffee broker at New York-based JPS Commodities LLC, said in a telephone interview.
Arabica-coffee for March delivery tumbled 1.4 percent to close at $1.421 a pound at 2 p.m. on ICE Futures U.S. in New York, the lowest settlement for a most-active contract since June 2010. Prices have fallen 35 percent from a year ago.
Production last month was up 64 percent from a year earlier in Colombia, the second-largest grower of arabica beans, President Juan Manuel Santos said today in a speech to growers.
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