Arabica-coffee futures fell the most in seven weeks as speculators and producers stepped up sales. Cocoa also declined.
Last week, coffee reached $1.765 a pound, a 12-year high. The price “really didn’t have merit to be up at that level” because supplies are plentiful from Brazil, the world’s biggest producer, said James Cordier, a portfolio manager at OptionSellers.com in Tampa, Florida. Global equities plunged on economic concerns in the U.S. and China.
“When outside markets collapsed, all the speculators in coffee decided to get out and take profit on the big run-up,” Cordier said. Producers who “were holding out for higher prices” are selling to “lock in this entire rally,” he said.
Arabica coffee for September delivery fell 4.95 cents, or 2.9 percent, to $1.6315 a pound on ICE Futures U.S. in New York, marking the biggest drop for a most-active contract since May 6.
Robusta-futures for September delivery dropped $9, or 0.5 percent, to $1,701 a metric ton on the Liffe exchange in London. The price has climbed 31 percent this year.
Output in Brazil will climb 23 percent in the year starting July 1, the U.S. Department of Agriculture’s attaché has forecast.
This year, arabica futures have gained 20 percent. Inventories monitored by ICE have dropped 28 percent.
Cocoa futures for September delivery fell $159, or 5.1 percent, to $2,979 a ton in New York. In London, futures for July delivery dropped 34 pounds, or 1.3 percent, to 2,540 pounds ($3,830) a ton.