Aug. 15 (Bloomberg) -- Coffee headed for a second weekly decline in London on expectations of a larger harvest in Brazil, the biggest grower, and as the strengthening dollar reduced the appeal of commodities. Coffee and sugar also fell.

Brazil's coffee crop may expand as much as 36 percent this year, according to the U.S. Department of Agriculture. The country's trees are now in the higher-yielding part of a two- year cycle. The dollar rose to the highest in more than 5 1/2 months against the euro, diminishing investors' appetite for commodities as an alternative investment.

``There are expectations of a large crop in Brazil,'' Ricardo Santos, a coffee broker at Fortis, said by phone from London. ``I don't see anyone jumping to buy commodities.''

Robusta coffee for September delivery fell $39, or 1.8 percent, to $2,174 a metric ton as of 1:13 p.m. on the Liffe exchange in London. The contract has dropped 6.5 percent this week, adding to last week's 4.3 percent decline.

Brazil is the world's biggest producer of arabica coffee and second-largest grower of the robusta variety, after Vietnam.

The country's harvest may jump to 51.1 million bags from 37.6 million a year earlier and 46.7 million in the last higher- yield harvest, the USDA said June 2. A bag weighs 60 kilograms (132 pounds).

Among other agricultural commodities traded in London, cocoa for September delivery fell 27 pounds, or 1.8 percent, to 1,452 pounds ($2,704) a ton. White, or refined, sugar for October fell $4.80, or 1.2 percent, to $381.10 a ton on Liffe.

To contact the reporter on this story: Rachel Graham in London rgraham13@bloomberg.net.

Last Updated: August 15, 2008 08:21 EDT