Coffee prices are likely to recover in the second half of the year as traders start to focus on production for the 2013-14 season in top producer Brazil, according to the country’s National Coffee Council.
Arabica coffee on ICE Futures U.S. in New York has fallen 33 percent so far this year as traders sold the futures on anticipation of a record harvest in Brazil, the world’s biggest grower. The commodity is the worst performer on the Standard & Poor’s GSCI index of 24 raw materials.
“It’s likely that the market will continue to be speculative until August, when agents will turn their attention to the first official forecast for the harvest of 2013,” Silas Brasileiro, president of the council, known as CNC, said in a weekly report e-mailed today.
Brazil’s production next season is likely to drop as arabica trees enter the lower-yielding half of a two year cycle. The next crop may also be affected by a drought earlier this year and heavy rains that are now delaying harvesting, Brasileiro said.
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