Nov. 1 (Bloomberg) -- Coffee futures fell to the lowest price in four weeks on speculation that Europe’s struggle to contain its sovereign-debt crisis may slow the global economy, curbing commodity demand.
Greece’s government called a referendum on its latest bailout package, escalating concern that the country may default. European stocks dropped the most in five weeks, and the Standard & Poor’s GSCI Index of 24 raw materials fell as much as 3.1 percent. The dollar gained as much as 2 percent against a basket of major currencies, eroding the investment appeal of commodities.
“New worries about global growth, namely Europe, have put an end to rallies we saw in October,” James Cordier, a strategist and the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. “Greece is voting on something we thought was already done. Anytime the economy appears to be weakening, we assume the consumer will consume lesser brands of coffee.”
Arabica coffee for December delivery fell 1.5 percent to settle at $2.2365 a pound at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price slumped to $2.2045, the lowest since Oct. 3. The commodity gained as much as 5.1 percent last month.
Arabica prices are expected to fall next year, given bearish fundamentals, Marcel Smits, the chief executive officer of Sara Lee Corp., said at an American Chamber of Commerce meeting in Amsterdam yesterday.
Brazil, the world’s largest producer, may have a record crop next season, at 57 million to 58 million bags, Guilherme Braga, the head of CeCafe, the coffee exporters’ council, said on Sept. 28. That’s up by about a third from 43.1 million bags in the current season, according to Conab, Brazil’s crop forecaster.
Sara Lee, based in Downers Grove, Illinois, is the owner of the Senseo brand of individual coffee packets and the Café Pilao brand in Brazil.
In London futures trading, robusta coffee gained on NYSE Liffe.
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