July 19 (Bloomberg) -- Arabica coffee futures in Tokyo fell as much as 4.1 percent, the biggest fluctuation of any commodity today, as mild weather in Brazil helped the harvest and eased concern over the possibility of a crop-damaging frost.

Brazil grows about 43 percent of the world's Arabica, the variety favored by specialty roasters, including Starbucks Corp. and Tokyo-based Doutor Coffee Co. Supplies have risen since the country's harvest began last month.

Arabica coffee for delivery in May 2006 fell for the first day in three, dropping 800 yen to 18,610 yen per 69-kilogram bag on the Tokyo Grain Exchange at 10:34 a.m. local time.

``The harvest is progressing in Brazil,'' Kaname Gokon, an analyst at Okato Business Service, said in Tokyo today.

Coffee prices soared before the start of winter in Brazil last month on the prospect that frost would damage trees and hurt next year's crop. The frost season usually runs from mid-June to the end of July.

Japan is the third-largest coffee importer and has about 90,000 coffee and tea shops that sell almost $10 billion of beverages a year. The Tokyo Grain Exchange holds five daily sessions for Arabica coffee futures where buy and sell orders are matched through an auction.

New York

Lower coffee prices in Tokyo follow a drop in New York prices yesterday. Coffee prices in New York fell 5.1 percent on signs that U.S. processors have plenty of supply during their slowest sales season.

Coffee inventories held by roasters, warehouses and others in the industry rose 1.2 percent in June to a nine-month high, a report from the Green Coffee Association showed. Coffee futures have dropped 28 percent from a five-year high in March as imports from Latin America swelled U.S. supplies.

``All indications are if you're sitting on coffee, you're going to be sitting on coffee for awhile,'' said Raymond Keane, a coffee trader at Balzac Bros. & Co. in Charleston, South Carolina. ``Demand is very quiet from roasters here in the states and Europe.''

Coffee futures for September delivery fell 5.4 cents to $1.001 a pound on the New York Board of Trade, after dropping as low as 99.9 cents, the lowest since Jan. 18. Yesterday's decline was the biggest for a most-active contract since Nov. 16. Prices have declined from a high of $1.395 on March 11.

A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.

The biggest movers are screened for the size of the market and amount of daily trading.

To contact the reporter on this story: Fumishige Asano in Tokyo fasano@bloomberg.net.

Last Updated: July 18, 2005 23:45 EDT